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Rules on 'any spouse' quotes from annuity providers after transfer from final salary scheme?

by The Democrat 31 May 2010 |

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I'm transferring out from my final salary scheme to attract impaired life annuity rates which are more than double. I have, however, run in to one snag. The rules of my old scheme enforce the annuity provider to quote on an 'any spouse' basis. Being a male and always single, this puts me at a big disadvantage. Instead of the rates being nearly 10%, with the any spouse set-up, the rate subsides to just over 8% - a huge difference. Is there anything I can do to prevent being penalised in this way? Men die sooner than women - fact. Mortality rates reflect this. Would the Human Rights Act apply in this case? Any thoughts would be much appreciated.

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MikeGG1 posted
I presume that you are trying to do an Open Market Option (OMO). That is a replacement benefit.
The problem that the insurance companies have is that there are a not insignificant number of pensioners who 'marry' their carers. They are not really doing it to get married but to give them the benefit of the pension. There is usually a 6 month moratorium to prevent deathbed marriages.
Are you more than a year from normal retirement date? If so, you could take a transfer out to a personal pension. You wouldn't have to do matching benefits then.
Mike
Posted on 31 May 2010 | Love 1 love Report
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The Democrat posted
Hi Mike
Many thanks for your response.
A bit more detail... I have just opted out of the PCSPS, not a move many would recommend. This due to a heart attack last year, making me now eligible for impaired life rates which are approximately double those of my employer. I am over my employer's age of retirement, but still working full time. My plan is to invest the transfer sum in an annuity paying just under 10% and re-invest the proceeds in to further pension which I can take along with other stragglers I have accumulated over the years when I finally retire, hopefully within 3 years.
Together with my salary, the annuity will push me over the age allowance 'claw back' of 22,900 which I am now entitled to, but current Revenue rules allow for that allowance to be not affected by pension contributions.
Perceived wisdom might well say that there is no point in buying an annuity yet, just invest the lump sum for the 2 or 3 years and then take an annuity along with my other bits and pieces. Although we're not talking about large sums, they are to me and I am conscious of 'mortality drag' and the fact that impaired rates can subside the longer away one gets from a medical episode. A bird in the hand is where I'm coming from.
I live with a partner who was not able to accumulate much pension before we got together. Still working, she has deferred her SRP which has the double whammy benefit of being paid in a lump sum tax free if deemed in the tax year when she has stopped work and under 949P on other earnings and also the lump sum is a total disregard for means tested benefit. So if I die first, she will qualify for pension credit, be entitled to full council tax credit and with the benefit of possibly 30K in the bank -can't be bad!
So deathbed marriage not an option, in any event my partner remains married elsewhere more for her kid's feelings than anything else.
I am quite prepared to sign a disclaimer to get over this 'any spouse rates' hurdle. The fact remains that, as it stands, my fund value is being hammered by a 20% reduction. I need to find a way to prevent this.
Cheers
Posted on 31 May 2010 | Love 0 loves Report

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