By Ruth Alexander The Inland Revenue is expected to release the final regulations governing transfe...
By Ruth Alexander
The Inland Revenue is expected to release the final regulations governing transfers from income withdrawal contracts from occupational pension to personal pension schemes this week.
The regulations, which will take effect 21 days after this event, provide a model set of rules surrounding the transferral.
The regulations will allow the transferral of an existing income withdrawal contract to a new personal pension provider. Until the introduction of these regulations an individual has had no ability to change provider once electing for income withdrawal.
A spokesperson for Equitable Life said the group will be allowing the transferral of income-drawdown plans for all policyholders and Skandia's pensions communication manager, Adrian Walker warned against hasty transferrals of drawdown plans out of the Equitable.
He said: "This rule will open up the possibility for people to transfer out of drawdown plans and change providers. However, on the subject of Equitable Life, before recommending a client transfers out of their Equitable drawdown plan, advisers must look at the net position of the client.
Walker said a move to another provider, which is offering better investment returns, would reap benefits in the long-term but would incur medium term losses because of Equitable's 10% MVA.
The regulations will also cover the changes to the format of benefits within a personal pension following a transfer from an occupational pension source, including S32 buy-out policies. These changes are intended to apply to any new personal pension effected on or after 6 April 2001.
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