Standard Life - SERPS Opt back in - loss of windfall?

HairyHatMan

I know there are indepth threads about the in and out of opting in or out, but this relates specifically to Standard Life and their probable demutulisation.

My wife has her 'opted out' part of her protected rights pension with Standard Life. Is there any possibility of this being eligible for any kind of pay out in the event of de-mutualisation, or can she go ahead and opt back in to the state pension scheme without loosing any possible windfall?

dunstonh

Is there any possibility of this being eligible for any kind of pay out in the event of de-mutualisation,

if she invested in the with profits fund, then yes.

can she go ahead and opt back in to the state pension scheme without loosing any possible windfall?

She can opt back in if she thinks it is right for her to do so. It will not affect her qualification for demutualisation bonus but it may reduce the amount payable. It depends on whether the next payment counts towards it. That is an unknown at this stage.

From a contracting out point of view, it has now been confirmed that you will be able to take a 25% tax free lump sum from contracted out benefits and the retirement age will be reduced to 50 (55 from 2010). Contracted in benefits will have no tax free lump sum entitlement and will be taken at the state retirement age, whatever that turns out to be in the future.

Milarky

Is the pension just 'protected rights' or does she also make additional contributions?

Assuming the pension is in with profits form, as dunstonh says, and so qualifies for some kind if windfall, do we think this will be in the form of a 'payout' [cash or shares] as opposed to something which mirrors the locked-in nature of the pension fund itself?

dunstonh

do we think this will be in the form of a 'payout' [cash or shares] as opposed to something which mirrors the locked-in nature of the pension fund itself?

I havent seen any indication of what method they use. I wouldnt be surprised if they pay the benefit back into the plans as a special bonus.

EdInvestor

Milarky wrote:

... do we think this will be in the form of a 'payout' [cash or shares] as opposed to something which mirrors the locked-in nature of the pension fund itself?

The plan is for a public listing on the stockmarket, thus the compensation is likely to be in shares, as with Norwich Union and Friends Provident. If the company was bought prior to DM the windfall would likely be in cash, as with Scottish Widows.

Adding compensation money to policies as at Scottish Life (or the Equitable Life so called "compromise deal") has now been discredited as it tends to get taken away later.:mad:

SL management is very unlikely to go that route as it would jeopardise the success of the DM vote - trust is already at a very low level due to past mistakes, so any suggestion of skullduggery on windfall money would likely be strongly rejected by the membership.They couldn't risk that.