Justgroupplc - for annuity purchase

Wurly

Hi
I'm waiting for some documentation to arrive from RoyalLondon, it will require signing very soon to start my pension. I have a GAR so RL are going to use a company called justgroupplc to provide the pension.
I have been looking around their website and i noticed this statement

The companies within the Just Group are authorised and regulated in the United Kingdom by the Financial Conduct Authority and / or the Prudential Regulation Authority

It is the and / or bit. Why would there be two regulating authorities?
Any other thoughts/comments about justgroupplc would be appreciated.
Thanks

dunstonh

It is the and / or bit. Why would there be two regulating authorities?

Financial services has two regulators. They focus on different parts of the industry and have different focuses. The PRA is looking at the too big to fail scale. Banks, building societies, insurers etc. Its role is to make sure these big firms are financially secure. Things like solvency and stress testing.

The FCA deals with same things with smaller firms but also covers retail with all firms. So, the big companies would be covered by both. The old FSA missed most of the issues that came to light in the credit crunch. It focused on micromanagment of the often insignificant areas or smaller areas. It missed all the big ticket stuff (like NR and B&B). So, the PRA was formed to focus on that.

Royal London are currently considering offering a buy out of GARs. i.e. offering an increased lump sum to give up the GAR. That is coming towards the end of this year. So, you may wish to hold off.

kidmugsy

dunstonh wrote: »

So, you may wish to hold off.

You might like to check that holding off won't cost you the GAR.

Wurly

Many thanks for the replies
The paperwork I have received gave several instances where I could lose the GAR, delaying taking it isn't one of them, but I will double check that.
Adding spouse, payment escalation, increasing 5yr guarantee, moving to another provider, payment frequency other than monthly will all lose GAR.
This has thrown me a real curved ball.
RL are having to stump up a lot of cash to make up the shortfall. £41k on a £63k pot. I can't help feeling I've gained anyway.
My understanding is then, If I hang on, I could loose out on up to £4800 of pension payment, but may(?) gain on extra TFLS if they intend to 'buy me out'.
I was intending not to have any TFLS because of the guarantee.
It's a difficult one to judge. Without knowing, I can't foresee the offer being that generous above what is being offered.....

Ok, I did a bit of digging. I presume the 'buy out' is to allow for access to recent pension freedoms, drawdown etc. Figures of 40%-80% increase on pension pots depending on plan?
I have not received any paperwork with regard to this so, i'll make a call to RL on Monday

dunstonh

kidmugsy wrote: »

You might like to check that holding off won't cost you the GAR.

Good point. If it's a Talisman plan then the GARs increase annually to 75.

RL are having to stump up a lot of cash to make up the shortfall. £41k on a £63k pot. I can't help feeling I've gained anyway.

This suggests a section 32 buy out bond. Is it?

sandsy

The buy out only applies to old Scottish life policies, according to this article:

http://citywire.co.uk/new-model-adviser/news/royal-london-asks-clients-if-they-want-to-trade-in-gar-for-cash/a1088295?ref=new-model-adviser-todays-news-list#

It does not seem that certain yet that it will definitely happen.

kidmugsy

Suppose you accept the GAR. How might you protect yourself from future inflation? You could consider deferring your State Retirement Pension. Though I think the offer on new-style pensions is insipid it may be better than an alternative such as investing in index-linked gilts.

Another possibility is to look at ordinary annuity rates for someone your age. Let's pretend 5%; let's pretend yours is 9%. Then you aim to live off 5% (less tax) and invest the remaining 4% (ditto) to protect you from inflation in the future. For example, even if you've stopped earning you could contribute up to £3,600 gross into a pension.

Wurly

dunstonh wrote: »

Good point. If it's a Talisman plan then the GARs increase annually to 75.
This suggests a section 32 buy out bond. Is it?

I am unsure what section 32 is, but I can tell you I foolishly transferred a DB pension a few years after I took redundancy. I was a lot younger (35) and did not understand (there was no internet or advice readily available). I have beaten myself up many times over it, but took solace when I found out about from the GAR of 7.61%. Pension was with Refuge then CIS and now RL.
I also have another pension of around £30K with a GAR of 5.64%. This one has includes a spouses pension, but not available 'til i'm 65.
I'm 60 now btw, with a couple years short of max SP2 (OH is already at max). I also have a DC pot of £160K, so not all bad.
I also had a small trivial pot of around £10K of which I am drawing down now. All of these pensions apart from the DC, were part of the transfer.
My plan was to have the annuity and SP2 as a failsafe income and take the full TFLS from my DC pot, fill up my ISA with that and drawdown up to my tax limit per year. Any other spending I need will be taken from my ISA.

Kidmugsy, I wasn't planning on deferring state pension but might consider it but I really need to see how my health goes. I have 6years to go yet!!
For safeguarding over inflation. I have included a figure of 5% in my spreadsheet calculations for 25year period of time. that is probably too high but I can always adjust. I'm afraid if I sign for the annuity there is no % increase and no going back...and i'm aware of that. I also intend to make use of the £3600 into a SIPP allowance, thanks.


I have to add, i'm really enjoying the 6months of retirement, but I need to get the rest of the plan in place.

Sandsy, that is the same article I read. My pension was with CIS. I'm going to call RL anyway.

Back to my original enquiry, what about JustGroupPLC, presume they will have passed all checks from the two regulation authorities so I'm safe to sign paperwork?

dunstonh

I am unsure what section 32 is,

based on your description, it is what you have.

Back to my original enquiry, what about JustGroupPLC, presume they will have passed all checks from the two regulation authorities so I'm safe to sign paperwork?

They wouldnt be trading if not. They are a major player.

xylophone

I am unsure what section 32 is,

http://www.financialadvice.net/s32_buy_out_plan/zone/1288

Wurly

A slight twist to my pension thread.
Today I trudged through decades of paperwork to discover my original Refuge Assurance schedules. One has a basic capital sum of £8641.00 GAR 7.61% and is a personal pension (with profits). I also found Refuge statements with BCS of £8641.00 from same policy.
Refuge Assurance were taken over by United Friendly around 1999 and Royal London 2001 or thereabouts.
The earliest statement I can find from United Friendly shows the BCS as £2794.00. From then on that policy is showing the lower amount. Over the years the policy has increased to £5768 with Royal London.
With an uplift for an annuity quote that figure is now around £10k.
I am sure there has been a mistake. The original figure of £8641 should have been used. Refuge Assurance statements in my possession proves this.
I called RL, and it would appear their records do not go back that far. They suggest I make a complaint of which I have done. It is going to be handled by a third party and they will contact me within 5days. I find it strange that they cannot deal with my query internally. is this normal procedure?

I also asked about the possibility of a 'buy out' on my GAR policies but they couldn't say, not surprisingly, I think it's news to them also.