Pension with Guaranteed Annuity Rate

[Prittstick]

I am a 50% Company Director and the company has a scheme for both directors with Aviva.

I recently started taking an interest in my pension as I am 59 and the Normal Retirement Date per my recent Statement of Reasonable Projection is 60. The scheme started in 1992.

This Statement has a 'Breakdown of Projected Fund at Retirement' figure and it is broken down over 3 rates: 9.82% Guaranteed Annuity Rate, 7% Guaranteed Annuity Rate and 5.726% Current Annuity Rate.

Have I really got a 'Guaranteed ' annuity rate, and if so does it make sense for the company to really ramp up contributions in the final year before NRA.

I dont know where the original documentation is. Thanks, in advance.

 

[Steven Barrett]

It sounds as if you do, you'd want to double check with Aviva. Those rates would apply to different premiums that were paid in over time.

e.g. Policy started at €1,000 a month. Those premiums get €9.82%.
You increased premium to €1,500 per month. The additional €500 gets the 7% rate
You increased the premium to €2,000. That additional €500 gets the 5.726% rate

So you see, they won't just allow you to pump large amounts of money in at the end and avail of really good rates.

What you can do is get your tax free lump sum calculated and put that into a plan so you don't have to take anything from the pool of money that can avail of the very good rates.

The ARF option will not be available if you purchase an annuity. Also, in most circumstances, those rates are for a single life pension so if you want a spouses pension, they may give you a reduced good rate or the market rate. It depends.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[Marc]

The ARF option is sometimes available by concession even if you elect for guaranteed annuity rates,

It is necessary to obtain the consent of the life office for the ARF to own the annuity as an asset of the scheme.

That way you might be able to get the best of both worlds

 

[Prittstick]

Thank you both