Your Annuity Payment Proportion

Is Your Annuity Payment In Proportion?












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  Welcome to The Complete Pension Guide 2017!


For – setting up a new pension, reviewing your pension, approaching retirement, looking into auto enrolment, and buying your annuity or entering income drawdown

Annuities: Immediate Vesting Personal Pension Plan (IVPPP) – Compulsory Purchase Annuity (CPA) – Purchased Life Annuity (PLA)

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Is Your Annuity Payment In Proportion?

Having your income paid with or without proportion is an option available to those who elect to receive payments in arrears. If you choose the ‘with proportion’ option and die between payments, your provider will make a partial payment based on the time between the final payment and your death. For instance, someone who is receiving their payments quarterly may get money on 1 April and die on 14 May. His or her provider will have to make a payment to cover the number of days between these two dates as the next payment was scheduled for 1 July. The provider makes the payment once they are officially notified of the annuity holder’s death.

Without Proportion simply means that the above scenario would not occur. If the annuity holder died on 14 May, his or her dependent would not receive any partial payment.

Other Information
Those who have invested in a Compulsory Purchase Annuity or have transferred money to an Immediate Vesting Personal Pension Plan may have additional rights.

Until 2002, the State Second Pension (S2P) was known as the State Earnings Related Pension Scheme. If you have contracted out of the S2P then there is a possibility that this fund may have money relating to a Guaranteed Minimum Pension, Section 9(2B) Rights or Protected Rights. This may prove to be confusing so it is essential for you to contact a financial advisor to find out what options and restrictions are available regarding the above information.