AXA Sun Life is allowing those that opt for its occupational drawdown plan, launched last week, to n...
AXA Sun Life is allowing those that opt for its occupational drawdown plan, launched last week, to nominate a charity of their choice in the event the group becomes the recipient of a windfall profit from the product.
If a scheme member goes into occupational drawdown and dies before buying an annuity the proceeds will pass to the spouse. If the spouse dies before age 75 then the funds go back to the employer. However, if the employer company has been wound up or no longer exists, then the pension funds will go back to the product provider.
Paul Smith, head of pensions development at AXA Sun Life, said: "These windfall profits could amount to millions of pounds over time. If this scenario happens we will pay the money to charity and we are allowing people to nominate the charity of their choice.
Since the Government enabled the occupational drawdown facility earlier this summer several product providers have stated they do not intend to launch a product immediately because of its limited appeal. They note most would be better off transferring to a personal pension and entering drawdown that way.
However, AXA Sun Life has a substantial amount of clients already using an alternative facility for occupational drawdown. It has 200 cases, worth an estimated £40m, in Section 32 annuities products that pay income but provide little flexibility. The group believes the occupational drawdown route will only appeal to those with sizeable funds who could be subjected to the GN11 restriction on transfers from occupational to the personal pension tax regime.
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