Zurich has enhanced its drawdown proposition by including the ability to drawdown income from protected rights.
The company’s ‘Flexible Drawdown Plan’ will also offer a ‘nil income enhancement’ feature, which means if the client decides not to take a regular income Zurich will provide an annual rebate to the fund.
Zurich says the decision to include protected rights - the part of a pension fund built up through contracting out of the State Second Pension (S2P) - in the drawdown facility for the first time provides clients with more options in their retirement.
The life insurer claims the launch of a self-invested element to the fund means investors will have more choice on the best way to meet their income needs.
As a result, the drawdown plan will offer investors a wide variety of self invested assets, including mutual funds, stocks and shares, commercial property and access to four leading discretionary fund managers, on top of Zurich’s current pensions proposition of more than 130 funds.
Dave Lowe, UK life pensions management director at Zurich, says: “We believe developing our pensions proposition is an evolutionary process. We will listen to feedback and continue to engage with advisers as we further develop our proposition.”
“We are confident these new features will prove popular with advisers and their clients and believe these enhancements, together with further developments planned for 2007, will be the launch pad for a future growth as we increase our presence in the UK individual pensions market.”
The insurer also says it plans to “invest heavily in e-enabling its pensions propositions during 2007” to allow its product wrappers to “integrate seamlessly” into advisers’ chosen business processes.
In the meantime, however, it says by launching the new protected rights facility, advisers and their clients will be able to invest both their protected and non-protected rights funds in the drawdown plan for the first time, which will provide investors with greater flexibility when considering their retirement options.
Lowe adds as the nil income drawdown market has developed strongly since A-Day, the enhanced proposition is designed to allow individuals to take advantage of this flexibility.
He says: “We recognise this is an attractive option for people considering their retirement options and we are confident our nil income enhancement will prove popular for investors.”
Zurich claims it has developed the enhanced proposition particularly with the needs of advisers and clients in mind, with the new Plan designed to appeal to customers who need ongoing advice, with Zurich intending to support advisers providing independent advice with “appropriate ongoing remuneration”.
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