Around 10% of Addition Voluntary Contribution schemes are failing to offer members the Open Market Option on annuities despite a legal requirement, claims Hewitt.
The annual AVC survey by Hewitt Associates reveals while many AVC members appear to have greater confidence in their investment, around 1 in 10 schemes are costing their members up to 19% of their retirement benefits each year by failing to offer the Open Market Option (OMO). Since April 2006, AVCs have been legally required to offer members an ‘open-market’ selection of an annuity which allows them to choose a ‘best-price’ option, but the Hewitt survey of 107 schemes reveals 10% are failing to offer this, meaning many members are losing out. For example the firm says a 65-year-old fema...
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