Occupational scheme retirement ages and PCLS
Colinstewart76
Member
Hi all
This is one I am working on at the moment:
Client was an 87-89 member of 2 occupational pension schemes in respect of the same employment - we think - there's nothing to suggest he's opted to be a post-89 member. His benefits within each scheme are held in 2 different policies with different insurance companies (not uncommon) and we're working with them to get all the information needed to work out if he has any scheme specific PCLS. That's the ok bit (albeit admin intensive).
The issue I have is that, we believe the schemes have a normal retirement age of 60, but one of the plans with one of the providers has an NRA of 65. Am I right in thinking, regardless of the NRA on the policy, the NRA as far as calculating his max PCLS (as I think he will be relying on accelerated PCLS accrual being an 87-89 member) will be whatever the scheme rules say?
As an aside, I can't understand why the NRAs would be different other than clerical error. It's potentially a bit of an issue, because the policy with the 65 NRA has a guaranteed annuity rate that only applies at that date (10% single life, level) but no guarantees at 60. Seems a bit of a cock up to me.
This is one I am working on at the moment:
Client was an 87-89 member of 2 occupational pension schemes in respect of the same employment - we think - there's nothing to suggest he's opted to be a post-89 member. His benefits within each scheme are held in 2 different policies with different insurance companies (not uncommon) and we're working with them to get all the information needed to work out if he has any scheme specific PCLS. That's the ok bit (albeit admin intensive).
The issue I have is that, we believe the schemes have a normal retirement age of 60, but one of the plans with one of the providers has an NRA of 65. Am I right in thinking, regardless of the NRA on the policy, the NRA as far as calculating his max PCLS (as I think he will be relying on accelerated PCLS accrual being an 87-89 member) will be whatever the scheme rules say?
As an aside, I can't understand why the NRAs would be different other than clerical error. It's potentially a bit of an issue, because the policy with the 65 NRA has a guaranteed annuity rate that only applies at that date (10% single life, level) but no guarantees at 60. Seems a bit of a cock up to me.
Outsourced paraplanner for The Paraplanners. President of the Scottish Petanque Association
Comments
An NRA on an insured plan is purely an administrative think so the provider knows when to start warning policyholder that their plan is coming to the maturity. Bear in mind these plans were written when your only option was TFC and annuity.
If the policies were originally set up by way of regular contributions then the different NRA's could be due to a better (higher) commission (non disclosed) for the longer term.
For lump sum contributions the longer term may have benefited from a higher initial allocation rate.
Don't you just miss the 1980's type commission and charging structures!!!