SERPS Opt Back In - Poor Advice?

dunstonh

Phoenix say both Protected and Non-Protected policies have the GAR of 10.93% and have added a terminal bonus to the Protected but not the other although the original policy schedules show both having such a benefit (originally called a Capital Bonus).

I would say that is possibly an error as protected rights required the income to be paid a different way to non-protected rights at the time. I would query that and get it verified in writing.

Obviously I do feel very fortunate that I signed up in 1988 just before GAR's were terminated and urge everyone to check their policies if taken out before 1990 as I know of no other legal way to get this sort of return and it should not be given away even if the current pension holder has bad reviews.

The last provider offering a GAR pulled out in 1995.

The full GAR is subject to taking a single life, no guarantee, no escalation, payable annually in arrears annuity but Phoenix has flexibility and can offer a joint life, 5 year guarantee, payable monthly in advance solution for a reduction to 10% or variations on the theme.

It would not have been possible for the protected rights to do single life with no escalation when you bought this.

So, either the GAR doesnt apply to the protected rights or it adjusted from the base GAR to reflect the terms the protected rights would have been required to issue the annuity on at that time. With protected rights reclassified as non-protected rights a few years ago, that may not be an issue now. Although it may explain why the returns have been different.