National Mutual has launched an occupational drawdown plan, the second life office to do so since th...
National Mutual has launched an occupational drawdown plan, the second life office to do so since the Inland Revenue expanded the drawdown regime back in July.
Richard Taylor, pensions development manager, said National Mutual considered it important to provide an occupational drawdown plan to enable IFAs to offer their clients the widest possible range of retirement options.
Its Executive Drawdown Plan allows members of money purchase occupational pension schemes to take their tax-free cash and draw an income from the remaining fund before the purchase of an annuity. The income drawn down each year can be between 35% and 100% of the annuity that could be purchased, based on rates provided by the Government Actuary's Department. Benefits must be fully secured by the purchase of an annuity by age 75.
AXA Sun Life was the first to launch an occupational drawdown plan for members of money purchase occupational pension schemes, operating under the permanent rules published in PSO Update 54. This is available as a transfer plan or may be written under the rules of an existing scheme.
Taylor said: "Although the permanent rules are more restrictive than we had hoped, particularly in relation to the application of Inland Revenue limits and the form of death benefits, we believe there are clients for whom this will be the most appropriate option. Those seeking to maximise their tax-free cash entitlement or who cannot transfer to a personal pension may find occupational drawdown an attractive alternative to annuity purchase."
Charges for the new plan will be in line with those for National Mutual's other drawdown plans. IFA commission is negotiable, and is capped at 3% initial and 0.5% renewal.
No preferred charging model
To 1,552 families and businesses
HL and Liberty SIPP slowest
Lifetime and annual allowances