Annuity Policy For benefits bought out from an occupational pension scheme or a section 32 buy-out plan. Annuity policy for benefits bought out from an occupational pension Please keep this Policy scheme or a section 32 buy out plan. in a safe place, along with This is your Policy. It contains the full legal explanation of your annuity and the Policy the accepted Annuity Conditions – that is, the contractual terms and conditions – relating to it. This Policy Quotation, the Statement is designed to provide trustees of occupational pension schemes with the means of of Benefits and the Key securing either a lifetime annuity or a scheme pension (as defined in section C of this Features Document. Policy) in the individual's own name. This Policy can also be used to provide a lifetime annuity for: > an individual who wishes to buy their pension under a section 32 buy-out plan with a different insurer, or > an individual who has already started to draw their pension in the form of income drawdown, and who has asked the trustees or the insurer to replace that pension with a lifetime annuity. The Policy outlines our understanding of the tax treatment and regulations governing your annuity in force at the date the Policy is issued. It is important to understand that like all legislation, the tax treatment and other provisions can change in the future. Definitions A number of specific words and expressions are used in this Policy. These words and expressions are shown in bold print and their meanings are set out in section C of the Policy. Address for correspondence Please address any letter about this document, called the "Policy", to: Prudential Annuities Customer Contact Centre Stirling FK9 4UE Please read the Policy, Statement of Benefits and the Annuity Quotation carefully. Please return the documentation to us at once if any correction is necessary. Important This Policy is a general-purpose annuity policy. It describes a variety of options, features and benefits. Some of these may not be relevant to your annuity. The Policy needs to be read alongside the accepted Annuity Quotation in order to understand the particular options, features and benefits that apply. If you would like copies of this document in Braille, large print or on audio tape, please contact us at the address shown above. Planning For Retirement 03 Contents A. General 05 1. Introduction 05 2. Important notes 05 B. Agreement 06 C. Meaning of words 07 D. Conditions 12 1. First annuity 12 2. Second annuity 12 3. Third annuity 14 4. Payment of benefits 15 5. Annuity guarantee 16 6. Changes to amounts of annuity payments 17 7. Taxation 20 8. Non-profit benefits; surrenders; transfer of ownership 20 9. Production of documents and other evidence 21 10. Proof of age and marriage/civil partnership 21 11. Notices to annuitants 21 12. Changes to benefits and amendment of policy conditions 21 13. Divorce and dissolution 22 14. Annuity terms not in accordance with provisions of employer's scheme or section 32 buy-out plan 22 15. Applicable law 22 16. Financial Services Compensation Scheme 22 17. Third Party Rights 22 E. Other Information 23 1. Complaints 23 2. Long-term business 23 3. Pensions business 23 04 Planning For Retirement A. General 1. Introduction 2. Important notes If any of the compulsory requirements apply to you, this will be indicated in The value of your pension benefits under (a) Contracting-out benefits the Annuity Quotation. your pension arrangements (either an This Policy covers both guaranteed occupational pension scheme run by minimum pensions and protected (c) Annuity terms to be in your employer or a section 32 buy-out rights pensions, which are types of accordance with the provisions of plan to which your occupational scheme pension that can arise if you were the employer’s scheme or section benefits were previously transferred) contracted-out of the State Second 32 buy-out plan Some of the terms has been paid to Prudential. This is so a Pension or its predecessor, the State – such as the level of increases to lifetime annuity or scheme pension Earnings-Related Pension Scheme. pensions and guarantee periods can be set up for you and you can start – chosen for your annuity must be If the Annuity Quotation shows only permissible under the provisions to receive your pension. one of these types of contracting-out of the employer’s scheme or the This payment is likely to have been made pension, then references to the other section 32 buy-out plan. At the to us as a result of your having exercised type will not apply to you. time when the Annuity Quotation an open market option – an option which is accepted, we require confirmation If the Annuity Quotation does not enables you to purchase a lifetime that the accepted terms are show any type of contracting-out annuity with a different insurer from permissible. We cannot accept any pension, then your Policy will not the provider of the employer's scheme liability if the terms of the annuity are include any contracting-out benefits or the section 32 buy-out plan. not allowed under the provisions of and you should therefore disregard You have chosen Prudential as the the employer’s scheme or the all references to guaranteed provider of your annuity. section 32 buy-out plan. If we minimum pension and protected discover that any of the terms of Alternatively, this payment may have rights pension. your annuity do not comply with been made to us in circumstances where (b) Compulsory requirements those provisions, we may have to the trustees of the employer's scheme Certain compulsory requirements change the amount and/or terms of are required to pay a scheme pension apply to pensions arising from your annuity. See also section D14 of and they either wish or need to purchase contracting-out. The compulsory this Policy. a policy that is in your name. requirements concern increases to (d) Lifetime Allowance You will receive (or have already pensions, guarantee periods and At the time when the Annuity received) other documents from us. the need to provide pensions for your Quotation is accepted, we require These include the following: legal spouse or civil partner on your confirmation that the value of death. The compulsory requirements > Annuity Quotation are explained in this Policy and apply the benefits does not exceed the Lifetime Allowance. We cannot > Key Features Document to benefits bought out from both an accept any liability if it is later employer’s scheme and a section > Statement of Benefits discovered that your available 32 buy-out plan. Lifetime Allowance has Please read these documents and Compulsory requirements regarding been exceeded and you have the Policy carefully. They all contain increases to pension also apply to become liable to pay a Lifetime important information. You should keep pensions accrued in “defined benefit” Allowance Charge. them all in a safe place, and ensure the pension schemes on or after 6 April people who will handle the affairs of your 1997. These may apply to your estate if you die know where they are. annuity if the Policy is for benefits from an employer’s scheme. They do not apply if the Policy is for benefits bought out from a section 32 buy-out plan. Planning For Retirement 05 B. Agreement Subject to section D14, we have agreed In this way, although the contract was The trustee or trustees of the to provide the benefits described in the entered into by the trustee or trustees employer’s scheme or the insurer Policy and the Annuity Quotation. of the employer’s scheme, or by the of the section 32 buy-out plan have The agreement results from the payment insurer of the section 32 buy-out determined that all contractual rights by the trustee or trustees of the plan, the Policy has been set up solely under the Policy are to be enforceable employer’s scheme or by the insurer for your benefit and the benefit of any only by you, the first annuitant, or such of the section 32 buy-out plan to us dependants stated to be so entitled. other person who may be entitled to of a premium, to buy benefits for you This agreement is designed to give you receive the benefit, and not by the that would otherwise be payable by the direct contractual rights with us and trustees or insurer. trustees of the employer’s scheme to allow you to deal directly with us. or the insurer of the section 32 buy-out plan. 06 Planning For Retirement C. Meaning of words In the Policy the words “Prudential”, Any change under section D6 is The Annuity Quotation will be issued "we", "us" and "our" refer either to: calculated as at the annuity change either by Prudential Retirement Income date and takes effect from that date. Limited or The Prudential Assurance > Prudential Retirement Income Limited, Please note, however, that if the annuity Company Limited. if the annuity is a Level Annuity, is payable “in arrears”, the new amount or a Fixed Increase Annuity, or an will actually be payable from the next Civil partner LPI Annuity, or an Increasing GMP A registered same-sex civil partner. payment date following the annuity Annuity, or an RPI-Linked Annuity, Since 5 December 2005, it has been change date. or possible for same-sex partners to Annuity start date register in the UK as civil partnerships. > The Prudential Assurance This is the effective date from which Certain provisions that previously applied Company Limited, if the annuity the Policy is set up. If the annuity is set only to spouses are now extended to is an Income Choice Annuity. up to be payable “in advance”, the first civil partners. The words "you" and "your" refer to the annuity starts to be paid on the annuity client named in the Annuity Quotation. start date. If, however, the annuity is set Employer’s scheme up to be payable “in arrears”, the first If this Policy has been set up to provide The "annuitant" is a person receiving an annuity will start on a later date, called pension in place of benefits arising from annuity. This can refer either to you or the first arrears date. an employer’s registered occupational to your spouse, civil partner, or other pension scheme, the employer’s dependant as defined below, depending The annuity start date is indicated scheme is that occupational pension on the context and circumstances. in the Annuity Quotation and the scheme. The pension that arises under an Statement of Benefits. It will be either: employer’s occupational pension scheme Act > the date on which we receive all of can be paid either by the trustee(s) of that This is the Pension Schemes Act 1993. the purchase money(s), or scheme through a policy set up in their name, or it can be paid through a policy Annuity change date > it may be a specified date agreed between the trustees of the set up in the name of the retiring scheme This is the date on which we change employer's scheme or the insurer member. This Policy provides the means the amount of a Fixed Increase of the section 32 buy-out plan. for the trustees of an occupational Annuity, an LPI Annuity, an RPI- pension scheme to buy an annuity with Linked Annuity, an Increasing GMP Annuity Quotation Prudential in the name of the retiring Annuity or an Income Choice Annuity This is the annuity quotation provided by scheme member. under section D6. The annuity change us and which has been formally accepted date may be either: First annuitant either by you, the first annuitant, or by the trustee(s) of the employer's scheme The first annuitant is the client named in > the anniversary of the annuity start date, or or by the insurer of the section 32 buy- the Annuity Quotation, being a member out plan, as appropriate. A copy of the of the employer's scheme or the holder > any other date that we agree with the accepted Annuity Quotation is issued of the section 32 buy-out plan. trustees of the employer's scheme with the Policy and the Statement or the insurer of the section 32 of Benefits as confirmation of the First annuity buy-out plan. accepted terms. An annual amount payable to the first annuitant. The first annuity is If the annuity change date is not the The accepted Annuity Quotation the total annual amount (including any anniversary of the annuity start date, forms part of the contractual guaranteed minimum pension or the first annuity change date must not documentation and this Policy protected rights pension) shown in the be more than twelve months following needs to be read and understood in Annuity Quotation as being payable to the annuity start date and must be a conjunction with it. You should keep the first annuitant. date on which a payment would normally these two documents together with the be made under the Policy. Statement of Benefits and the Key Features Document. Planning For Retirement 07 The first annuity will be, in whole or Fixed Increase Annuity If this applies, the amounts of in part: This is any part of the first annuity, guaranteed minimum pension payable second annuity, or third annuity in respect of the first annuitant, the > non-increasing, in which case it will be which is indicated in the Annuity second annuitant (or, if applicable the a Level Annuity, or Quotation as being subject to fixed third annuitant), will be shown on the > increasing by a fixed percentage, annual increases, and for which the Annuity Quotation. The amount(s) in which case it will be a Fixed payments will be increased at the of guaranteed minimum pension Increase Annuity, or same level throughout the life of shown may be an amount that includes the relevant annuitant. revaluation to the GMP date, or to any > linked to changes in the RPI, other date supplied to us by the trustees in which case it will be an The rate(s) at which the annuities will of the employer's scheme or the RPI-Linked Annuity, or increase will also be shown in the insurer of the section 32 buy-out plan. Annuity Quotation. If the amount shown on the Annuity > an LPI Annuity, in which case Quotation does not include revaluation increases will be linked to changes The way in which Fixed Increase up to the GMP date, the amount to in the RPI, subject to a maximum Annuities are increased is described which the first annuitant is actually percentage, or in sections D6 (e) and (f). entitled at the GMP date will include > an Increasing GMP Annuity, if any GMP date any further revaluation that is required part of the annuity is guaranteed This is the date from which the first by law. minimum pension accrued after 5 annuitant’s fully revalued guaranteed There will be a guaranteed minimum April 1988 and before 6 April 1997; or minimum pension (if any) must be pension only if the benefits under the payable. It is age 65 for men and age > linked to the performance of employer's scheme or section 32 60 for women. buy-out plan included this benefit. the Prudential With-Profits Fund, in which case it will be an Income Guaranteed minimum pension Guarantee period Choice Annuity. This is an annual amount paid as a result This is a period during which the More detail on the significance of these of being contracted-out of the State first annuity will continue to be different types of annuity is given in Earnings-Related Pension Scheme by paid, notwithstanding the death of section D6. reference to sections 13 to 23 of the the first annuitant within that period. Act, through membership of a “defined The guarantee period (if any) is Details of which one or more of these benefit” occupational pension scheme, options apply to the first annuity will set out in the Annuity Quotation. before 6 April 1997. The guarantee period cannot exceed: be indicated in the Annuity Quotation. First arrears date > five years from the annuity start date in the case of that part of If the payments are set up to be paid the annuity which is guaranteed “in arrears”, the first payment will be minimum pension or protected after the annuity start date. The actual rights pension; and date of the first payment in this case is the first arrears date, (For payments > ten years from the annuity start made “in advance”, see the definition date in the case of that part of of annuity start date and section D1.) the first annuity which is not guaranteed minimum pension or protected rights pension. 08 Planning For Retirement Income Choice Annuity Level Annuity Lifetime Annuity An Income Choice Annuity is This is any part of the first annuity, A lifetime annuity is an annuity an annuity which pays a retirement second annuity, or third annuity which is guaranteed to be payable income linked to the performance which is indicated in the Annuity for the lifetime of the first annuitant. of the Prudential With-Profits Fund. Quotation as being non-increasing, A lifetime annuity can only be paid and for which the payments remain under a pension scheme which is a If any part of the first annuity, at the same level throughout the life money purchase arrangement and second annuity or third annuity is an of the relevant annuitant. the first annuitant must have been Income Choice Annuity, we will issue a given the opportunity to select the separate Appendix which describes the Lifetime Allowance and Lifetime insurance company. special terms which apply. The Appendix Allowance Charge needs to be read in conjunction with this The Government has set a limit for This Policy is designed to provide Policy and the Annuity Quotation. each tax year on the value of the benefits either a lifetime annuity or a that can be taken from Registered scheme pension. Increasing GMP Annuity pension schemes (including pension This is any part of the first annuity, LPI Annuity arrangements such as the employer's second annuity or third annuity which This is any part of the first annuity, scheme or the section 32 buy-out is guaranteed minimum pension accrued second annuity or third annuity which plan) above which a liability for a after 5 April 1988 and before 6 April has been set up to have “limited prices Lifetime Allowance Charge may 1997. An Increasing GMP Annuity will indexation”. This means payments will be arise. This limit is called the standard increase each year either at a fixed rate linked to increases in the RPI subject to a Lifetime Allowance. each year (of not less than 3%) or in maximum specified percentage, as set line with changes in the RPI subject The Government has set the standard out in the Annuity Quotation. to a maximum percentage each year Lifetime Allowance for the tax year (of not less than 3%). 2011/12 at £1.8m. Pension credit rights If an annuitant becomes divorced (or if his Key Features Document The standard Lifetime Allowance or her civil partnership is dissolved), his or This is a document that we issue to you may, however, be varied in relation to an her ex-spouse (or ex-civil partner) may before you decide to buy your benefits individual if his or her benefits are eligible be awarded pension credit rights in with us. The Key Features Document for certain protections as authorised by relation to the benefits under the Policy. sets out the basic terms and conditions HM Revenue & Customs. of the contract with Prudential and is Policy When benefits are taken, the value of designed to help you make your decision This document, together with any the benefits will be compared with the about buying your annuity with us. As it endorsements, any addenda, or any individual's available personal Lifetime sets out the basic features of the contract, Appendix that we issue to supplement it. Allowance at that time. the Key Features Document forms part of the contract documentation, alongside If an individual takes benefits valued Policyholder the accepted Annuity Quotation, above his or her personal Lifetime This means you, the first annuitant the Statement of Benefits and the Allowance, the excess (when paid) and the client named in the Annuity Policy. The Policy reflects the terms and will be taxed at 25% if taken as pension Quotation. conditions set out in the Key Features and at 55% if taken as a cash sum. Document, but in much greater detail. This charge is called the Lifetime Allowance Charge. Planning For Retirement 09 Protected rights pension RPI-Linked annuity Second annuitant This is an annual amount paid as a result An RPI-Linked Annuity is any part of This is the first annuitant's legal spouse, of the first annuitant being contracted- the first annuity, second annuity or civil partner or other dependant. If a out of the State Second Pension (or the third annuity which pays a retirement dependant is named in the Annuity State Earnings-Related Pension Scheme) income linked to changes in the RPI. Quotation, then that named dependant on a “money purchase” basis, under The income is fixed for the first year is the second annuitant. The second section 9(3) of the Act. and then changes each year in line annuitant may be defined as the first with changes in the RPI. An RPI-Linked annuitant’s spouse, civil partner or The protected rights pensions Annuity will not necessarily increase and other dependant either at the annuity (if any) in respect of the first annuitant, may even decrease (see section D6 (g)). start date or at the date of his or her the second annuitant and the third death. The definition that applies will annuitant (if applicable) are shown in If the annuity is an RPI-Linked be shown in the Annuity Quotation. the Annuity Quotation. Annuity, this will be indicated in In the case of any contracting-out the Annuity Quotation. There will be a protected rights benefits, the benefits must always be paid pension only if the benefits under the to the spouse or civil partner at date of Scheme pension employer’s scheme or section 32 death (see sections D2 (j) and D3). A scheme pension is a type of pension buy-out plan included this benefit. which is guaranteed to be payable for the Second annuity lifetime of the first annuitant and which Registered pension scheme An annual amount, as shown on the cannot (except in narrowly defined A pension scheme or pension Annuity Quotation, which includes circumstances) be reduced. arrangement that is registered with guaranteed minimum pension (if any) HM Revenue & Customs. This gives A scheme pension can be paid by and protected rights pension (if any). the scheme or arrangement various the trustees of a pension scheme from There will be a second annuity if the tax advantages in respect of payments, the resources of the scheme. Where a annuity has been set up on what we call investments and benefits. scheme pension is secured through a “joint life” basis. an insurance company, the insurance If at the date of the first annuitant’s RPI company is chosen by the trustees or death there is a third annuitant (that is, Subject to section D6 (g), this is the administrator of the scheme. the second annuitant is no longer the Retail Prices Index published by This Policy is designed to provide a first annuitant’s legal spouse or civil HM Government. scheme pension or a lifetime annuity. partner and the first annuitant has a new spouse or civil partner), then we will reduce any second annuity by the amount of the third annuity. 10 Planning For Retirement Section 32 buy-out plan Third annuitant The first annuitant’s benefits from This is the first annuitant’s legal spouse an employer’s occupational pension or civil partner at the date of the first scheme may have been transferred to a annuitant’s death, if at that time the section 32 buy-out plan, being a policy second annuitant is no longer his or designed to provide benefits in place her legal spouse or civil partner and of those that would have been payable the first annuitant has a new spouse under the employer’s occupational or civil partner. pension scheme. In that case, the proceeds of that plan have been paid to Third annuity us to provide the first annuitant’s (and An annual amount of guaranteed any other annuitant’s) pension benefits. minimum pension (if any) and/or protected rights pension (if any). Since 6 April 2006, section 32 buy- There will be a third annuity only if out plans are classed as "Registered there is a guaranteed minimum pension schemes” within the terms pension and/or protected rights of Chapter 2 of Part 4 of the Finance pension and if, at the date of the Act 2004. Prior to that date they were first annuitant’s death, the second arranged under section 591(g) of the annuitant is no longer his or her Income and Corporation Taxes Act 1988. legal spouse or civil partner and the first annuitant has a new spouse or Statement of Benefits civil partner. This is a document that we issue as confirmation that the contract with us The third annuity will change or has been concluded and the annuity increase on the same basis that applies has been set up. It gives brief details of to the guaranteed minimum pension the benefits. Full details of the amounts and/or protected rights pension of the payments and the options that element of the second annuity. have been selected are set out in the Annuity Quotation. Planning For Retirement 11 D. Conditions 1. First annuity A “joint life” pension is compulsory We will pay the second annuity as in respect any protected rights described in section D4. We will pay the first annuity to you, pension, but only if the first the first annuitant. It starts with effect (f) Start date of second annuity annuitant is married or has a civil from either: Subject to section D2 (g), the second partner when the first annuity is annuity, including any part that set up. > the annuity start date, if the first relates to protected rights pension, annuity is payable “in advance” (that (c) Joint life option for other pensions will start as indicated on the Annuity is, at the start of specified intervals), or A “joint life” pension is not compulsory Quotation. There are two possibilities: in the case of: > the first arrears date, if the first > The second annuity may start with annuity is payable “in arrears” > any pension in excess of guaranteed effect from the date that the next (that is, following the end of minimum pension and protected payment of the first annuity would specified intervals), rights pension, and otherwise have been due, or and is paid as described in Condition D4. > protected rights pension if the > Otherwise, the second annuity will first annuitant is neither married start with effect from the day following The Annuity Quotation will indicate nor in a civil partnership when the the first annuitant’s death. whether the first annuity is payable first annuity is set up. “in advance” or “in arrears”. Any part of the second annuity that Such pensions will be set up on a “joint is guaranteed minimum pension will, The first annuity cannot in any life” basis if: however, always start with effect from the circumstances be exchanged for day following the first annuitant’s death. a lump sum payment (see also > the provisions of the employer’s Condition D8 (b)). scheme or the section 32 buy-out (g) Start date of second annuity plan allow the first annuitant to if first annuitant dies during 2. Second annuity exercise a choice and he or she has guarantee period requested a “joint life” pension, or (a) General (i) General This section applies where the > the trustees of the employer’s If the first annuitant dies before Annuity Quotation indicates that scheme or the insurer of the the end of the guarantee period there is a “joint life” pension. A “joint section 32 buy-out plan so (if any) that part of the second life” pension means that on the first require, according to the provisions annuity which is not guaranteed annuitant’s death, a pension will then of the employer’s scheme or the minimum pension or protected be payable to another person if they section 32 buy-out plan. rights pension will start as indicated are alive at that date, and this pension on the Annuity Quotation. (d) Amounts shown in will be the second annuity (or the There are two possibilities: Annuity Quotation third annuity – see section D3). The Annuity Quotation will show > The second annuity (excluding any (b) Compulsory requirements which parts of pension have been guaranteed minimum pension A “joint life” pension is a compulsory set up on a “joint life” basis and and/or protected rights pension) requirement in respect of any the resulting amount of the may start with effect from the date guaranteed minimum pension. second annuity. described in section D2 (f) above, This means that a “joint life” pension irrespective of whether the (e) Payment to second annuitant must be included even if the first guarantee period has expired. Subject to section D3, if the second annuitant is unmarried or is not In this case, if the first annuitant annuitant is still alive when the first in a civil partnership at the annuity dies within the guarantee period, annuitant dies, we will pay the start date. the remaining payments of the second annuity in respect of the first annuity (as described in second annuitant. section D5 (d)) will be said to 12 Planning For Retirement “overlap”, and therefore be paid > the annuity start date is before the (k) Effect of divorce or dissolution on simultaneously with the second first annuitant’s GMP date, and the second annuity annuity; or (i) This section D2 (k)(i) applies to: > the first annuitant dies before > Otherwise, the second annuity GMP date. > Guaranteed minimum pension (excluding any guaranteed In such circumstances, we will not minimum pension and/or > Pension other than protected pay the full amount of guaranteed rights pension where the second protected rights pension) will start minimum pension in respect of annuitant is defined in the Annuity with effect from the date described in the second annuitant (or the third Quotation as being the first section D2 (f) above or at the end of annuitant, if applicable). We will pay a annuitant's spouse or civil partner the guarantee period, whichever smaller amount that we calculate as being at the date of his or her death. is later. In this case, if the first required under the Act. annuitant dies in the guarantee In these cases, if the first annuitant The fully revalued guaranteed period, then the remaining payments divorces the second annuitant after minimum pension will however of the first annuity (as described in the annuity start date and does not be available from GMP date. section D5 (d)) will not “overlap”. remarry, then the second annuity The second annuity (excluding any (i) Second annuity cannot be (apart from any protected rights guaranteed minimum pension re-allocated pension) will not be payable. and/or protected rights pension) Except where sections D2 (j) or (k) Likewise, where a civil partnership will start only once the guarantee or section D3 (b) apply, the second is dissolved after the annuity start period has expired. annuity cannot be re-allocated to date and the first annuitant does another person, even if the second not enter into a new civil partnership, (ii) Guaranteed minimum pension and annuitant dies during the life of the then the second annuity (apart from protected rights pension first annuitant, or is divorced from any protected rights pension) will If the first annuitant dies before the first annuitant or where their not be payable. Where the first the end of the guarantee period civil partnership has been dissolved. annuitant has remarried or entered (if any) that part (if any) of the second (j) Requirement to pay contracting- into a new civil partnership, the annuity which is guaranteed out benefits on death to legal relevant part of the second annuity minimum pension or protected spouse or civil partner will be payable to the new spouse or rights pension will start in accordance If the first annuitant is married, that civil partner. See also sections D2 with section D2 (f). In effect payments part (if any) of the second annuity (k)(iii) and D3 (b) in relation to of guaranteed minimum pension which is guaranteed minimum contracting-out benefits including will always “overlap”. pension and/or protected rights protected rights pension. Where protected rights pension pension must by law be paid to the continues to be paid in respect of the first annuitant’s legal spouse at the (ii) In the case where the second first annuitant under a guarantee the date of death. In addition, if the first annuitant is defined in the Annuity concept of “with overlap” or “without annuitant is in a civil partnership, Quotation as the spouse or civil overlap” does not apply. Section D5 (c) that part (if any) of the second partner at the date of retirement or explains the way in which the annuity which is guaranteed at the date the annuity starts, that part guarantee operates in that case. minimum pension accrued between of the second annuity that is not 6 April 1988 and 5 April 1997 and/or guaranteed minimum pension (h) Reduction of spouse’s or civil protected rights pension must be and/or protected rights pension partner's guaranteed minimum paid to the first annuitant's legal will be payable to that person, pension on first annuitant’s death civil partner at the date of death. irrespective of a divorce or dissolution before GMP date and, if applicable, remarriage or This section applies where: See also section D3 (b) for the effect new civil partnership. See, however, of remarriage or taking a new civil > the annuity includes guaranteed sections D2 (k)(iii) and D3 (b) in partner on contracting-out benefits. minimum pension, relation to contracting-out benefits. Planning For Retirement 13 (iii) In the case where there is a The conditions are that: (Note: a legal civil partner is entitled protected rights pension, if the only to guaranteed minimum first annuitant has divorced and not > the first annuitant died before pension accrued between 6 April age 75 remarried, that part of the second 1988 and 5 April 1997 and/or annuity which is protected rights > the lump sum payment is made before protected rights pension). pension may be paid to another the date on which the first annuitant As such, where the second dependant. would have reached age 75 annuitant is still the legal spouse Likewise, where a civil partnership is > the lump sum payment extinguishes or civil partner at the date of the dissolved and the first annuitant all of the second annuitant's first annuitant’s death, there will does not enter into a new civil entitlement to any death benefits be no separate third annuitant. partnership, then that part of under the employer's scheme or Where the first annuitant and the second annuity which is section 32 buy-out plan, and second annuitant have become protected rights pension may > the lump sum does not exceed divorced (or their civil partnership be paid to another dependant. £18,000. has been dissolved) after the annuity If the first annuitant has remarried start date, and the first annuitant or has a new civil partner, section has remarried (or entered into a new 3. Third annuity D3(b) will apply. civil partnership) before the date (a) General of death, any part of the second (l) First annuitant is not married or This section D3 applies where: annuity which is guaranteed is not in a civil partnership minimum pension and/or This section D2 (l) applies: > there is a second annuity, and protected rights pension cannot > where the second annuitant is > the second annuity includes be paid to any second annuitant defined in the Annuity Quotation as guaranteed minimum pension named in the Annuity Quotation. the spouse or civil partner at the date and/or protected rights pension In such circumstances: of the first annuitant's death, and/or under the Policy. > any part of the second annuity > where the annuity includes This section does not apply where which is guaranteed minimum guaranteed minimum pension. the first annuitant was unmarried pension and/or protected rights or was not in a civil partnership at pension will become the third Where the annuity has been set up the date the first annuity was set up, annuity, on a joint life basis, even though the and he or she decided not to set up first annuitant was unmarried or any protected rights pension on a > the second annuity will be was not in a civil partnership at the “joint life” basis (see section D2 (b)). reduced by the amount of the annuity start date, the second third annuity, and annuity will only be payable if the (b) Requirement to pay contracting- first annuitant is actually married out benefits on death to legal > the remainder of the second annuity or in a civil partnership at the date spouse or civil partner will remain payable to the second of his or her death. As stated in section D2 (j), if the annuitant, unless we agree otherwise. first annuitant is married or in a (m)Dependant's commutation lump (c) Payment to third annuitant civil partnership, that part (if any) sum benefit If section D3 (b) applies and if the of the second annuity which is Where the rules of the employer's third annuitant is still alive when guaranteed minimum pension scheme or the section 32 buy-out the first annuitant dies, we will pay and /or protected rights pension plan so allow, and where certain the third annuity in respect of the must by law be paid to the first conditions are met, the second third annuitant. annuitant’s legal spouse or civil annuity may be paid as a lump sum. partner at the date of death. We will pay the third annuity as described in section D4. 14 Planning For Retirement (d) Start date of third annuity > the lump sum payment extinguishes The Annuity Quotation will reflect The third annuity, being composed all of the third annuitant's these special provisions if they entirely of guaranteed minimum entitlement to any death benefits have been selected for the second pension and/or protected rights under the employer's scheme or annuity. If they have been selected, pension will start with effect from the section 32 buy-out plan, and they will automatically apply to the date set out in either section D2 (f) or third annuity. D2 (g)(ii), depending on whether the > the lump sum does not exceed £18,000. Payment must be made to the first annuitant dies before or after relevant annuitant. the end of any guarantee period. 4. Payment of benefits (c) Payment intervals If the first annuitant dies before (a) Payment to first annuitant We will pay annuity instalments at the end of a guarantee period We will pay the first annuity for the the intervals set out in the Annuity in respect of protected rights rest of the life of the first annuitant, Quotation. pension, section D5 (c) will also apply in relation to the third annuity. or, where there is a guarantee Where the annuity is stated in the period which continues after the Annuity Quotation to be payable (e) Reduction of guaranteed death, (subject to section D5) until "in advance", payment will be made minimum pension on death before the end of the guarantee period. at the start of the specified interval. GMP date Section D2 (h) also applies Subject to sections D5 (c) and (d) and Where the annuity is stated to be to the third annuity, where: section D13, the first annuity must payable "in arrears", payment will be > that annuity includes guaranteed be paid to the first annuitant. made after the end of the specified minimum pension interval. The Annuity Quotation (b) Payment to second annuitant will indicate whether the annuity is > the annuity start date is before the and/or third annuitant payable “in advance” or “in arrears”. first annuitant’s GMP date, and We will pay the second annuity for the rest of the life of the second (d) Death of annuitant or annuitant > the first annuitant dies before annuitant (and, where applicable, ceases to be entitled to annuity GMP date. the third annuity for the rest of If the annuitant dies or stops being (f) Dependant's commutation lump the life of the third annuitant) entitled to an annuity partway sum benefit except where: between two annuity payments: Where the rules of the employer's > the second annuitant (or third > where the annuity is payable scheme or the section 32 buy-out annuitant if applicable) is the "in advance" or where the annuity is plan so allow, and where certain first annuitant’s spouse or civil payable "in arrears" and the Annuity conditions are met, the third annuity partner and special provision has Quotation indicates that it has not may be paid as a lump sum. The been made for the second annuity been set up to provide a proportionate conditions are that: or third annuity to stop on the last payment, the recipient can keep > the first annuitant died before spouse’s remarriage or on the civil the full amount of the last payment age 75 partner entering into a new civil partnership, or > where the annuity is payable “in > the lump sum payment is made arrears” and the Annuity Quotation before the date on which the first > special provision has been made for indicates that it has been set up to annuitant would have reached the second annuity to be payable to provide a proportionate last payment, age 75 a person who is a dependant solely we make a payment to the recipient because that person is under age to take account of the period 23 when the first annuitant dies. between the date of the last payment In such a case the annuity must stop and the date the recipient died or when the second annuitant reaches stopped being entitled to the annuity. age 23. Planning For Retirement 15 (e) Splitting annuities 5. Annuity guarantee (c) Guarantee period for protected We will not split any payment rights pension between two or more people, except (a) General This section applies only if there is in the circumstances where either: This section D5 applies if: any protected rights pension, and a guarantee period has been > a third annuity is payable due to the > the Annuity Quotation indicates selected. If the first annuitant dies first annuitant either remarrying or that there is a guarantee period before the end of the guarantee entering into a new civil partnership in relation to any part of the first period (if any) and there is no and the balance of the second annuity, and second annuitant or third annuity remains payable to the second annuitant (as described > the first annuitant dies before the annuitant, we will pay the further end of the guarantee period. instalments of the protected rights in section D3 (b), or pension for the remainder of Different guarantee periods may the guarantee period to the > an ex-spouse or ex-civil partner has apply to different parts of the first been awarded pension credit rights first annuitant’s legal personal annuity. Likewise, the terms that representatives. If there is a second in relation to an annuitant's benefit apply to the guarantee period may annuitant (or third annuitant, under the Policy or an annuity be different for different parts of the if section D3 (b) applies) who is alive becomes subject to a pension sharing first annuity. on the first annuitant’s death before order as described in section D13. If a guarantee period has been the end of the guarantee period, (f) Payment method the guarantee operates to increase selected in relation to part or all Payments to annuitants will be by the second annuitant’s protected of the first annuity, this will be direct transfer to a bank or building rights pension (or the third reflected in the Annuity Quotation. society account. annuity, if section D3 (b) applies) up (b) Compulsory requirements to the level of the first annuitant’s (g) Overseas annuitants It is not compulsory to select a protected rights pension for the Special arrangements may be guarantee period in respect of any remainder of the guarantee period. necessary for the payment of an guaranteed minimum pension or annuity if we are making payments (d) Guarantee period for protected rights pension payable to an annuitant and he or she moves other pension under the first annuity, but if one is overseas. The relevant annuitant This section applies where there selected, then certain compulsory should contact us for further details is pension payable under the requirements will apply. if this applies. In any event, if we Policy other than protected rights start the annuity whilst an annuitant Under current legislation, any pension, and a guarantee period is a United Kingdom resident and guarantee period in respect of such has been selected. This section he or she then moves overseas, benefits must not exceed five years. includes guaranteed minimum the annuitant must inform us when pension. If the first annuitant dies he or she leaves the United Kingdom. Any guarantee period selected for before the end of the guarantee all or part of the first annuity must period (if any), we will pay the be permissible within the provisions further continuing instalments of of the employer’s scheme or the first annuity which are not the section 32 buy-out plan. protected rights pension for the We reserve the right to change any remainder of the guarantee period. guarantee period or the terms that apply to it, if we discover that the Subject to section D8 (c)(iii), guarantee period or the terms selected we will pay these instalments to do not comply with those provisions. the first annuitant’s legal personal representatives. 16 Planning For Retirement If the Annuity Quotation so The Defined Benefits Lump Sum Death 6. Changes to amounts of indicates, the further continuing Benefit will be equal to the total value annuity payments instalments will take account of any of the instalments of the first annuity changes that would have been due (other than protected rights (a) General under section D6. pension) payable in the guarantee The provisions that apply under this period, reduced by the total value of section D6 depend upon the type (e) Effect of guarantee period of pension and upon the selection the instalments of the first annuity on start date of second made, as set out in this section D6 (other than protected rights annuity and/or third annuity and in the Annuity Quotation. pension) paid to the first annuitant See section D2 (g) for details of the up to the date on which the first effect of the guarantee period on The first annuity, the second annuitant died. the date that the second annuity annuity and/or the third annuity and/or third annuity starts. If the Annuity Quotation so indicates, may be (in whole or part): the Defined Benefits Lump Sum Death (f) Defined Benefits Lump > a Level Annuity, in which case Benefit will: the payments will remain at a Sum Death Benefit fixed level amount, or The Annuity Quotation may > take account of any changes to the provide for a lump sum, known as a pension that would have been due > a Fixed Increase Annuity, Defined Benefits Lump Sum Death under section D6, and/or in which case payments will Benefit, to be payable instead of increase by a fixed, pre-selected continuing instalments of the first > be discounted by a reasonable percentage, or amount determined by us to allow annuity (other than protected for the payment of the remaining > an RPI-Linked Annuity in which rights pension). In such a case, the instalments of the first annuity case payments will be linked to terms of this section D5 (f) will apply (other than protected rights changes in the RPI (including instead of section D5 (d). A Defined pension) payable in the guarantee decreases, unless a "negative Benefits Lump Sum Death Benefit period being made earlier than inflation" guarantee applies as may only be paid where the annuity when they would otherwise have described in section D6 (g)); or has been set up to provide pension been made. in place of benefits arising from a > an LPI Annuity, in which defined benefit occupational pension Subject to section D8 (c)(iii), we will case payments will be linked to scheme, where the rules of the pay a Defined Benefits Lump Sum increases in the RPI, but subject to employer's scheme so allow and Death Benefit to the first annuitant's a maximum percentage increase as where the following conditions legal personal representatives. indicated in the Annuity are met: Quotation, or A Defined Benefits Lump Sum Death > the first annuitant died before age 75; Benefit counts towards the first > an Increasing GMP Annuity, annuitant's available personal if any part of the annuity is > the payment is made within two years guaranteed minimum pension Lifetime Allowance and the of the date on which the first recipient(s) must pay any Lifetime accrued after 5 April 1988 and annuitant died, and Allowance Charge. before 6 April 1997, or > we have not agreed to pay any > an Income Choice Annuity, other form of authorised lump sum in which case payments will be death benefit in place of the annuity linked to the performance of the instalments that would have been Prudential With-Profits Fund. paid over the remainder of the guarantee period. Planning For Retirement 17 Any basis selected for all or part of an If different options apply to (ii) Defined benefits accrued after annuity must be permissible within the distinct parts of an annuity, 5 April 1997 the provisions of the employer’s this will be indicated in the If: scheme or the section 32 buy-out Annuity Quotation. plan. We reserve the right to change > the Policy is in respect of (c) Compulsory requirements benefits bought out from an the terms that apply to an annuity, (i) Guaranteed minimum pension employer’s scheme, and if we discover that the basis selected Any guaranteed minimum does not comply with those pension must be set up > any part of the first annuity provisions (see also section D14). relates to benefits accrued to comply with legislative under a defined benefit Where the Policy is for a scheme requirements as follows: occupational pension pension, the pension cannot be set up as an Income Choice Annuity. > guaranteed minimum scheme after 5 April 1997, pension earned in relation to then legislation requires this Guaranteed minimum pension tax years before 6 April 1988 pension to increase in payment. cannot be set up as an Income does not have to increase and This means that the annuity Choice Annuity. will normally be set up as a must, at the very least, be an Level Annuity, and (b) Different terms can apply for LPI Annuity increasing in different parts of an annuity > guaranteed minimum payment as follows: An annuity may be comprised of pension earned in relation different parts – for example it may to tax years between 6 April > pension accrued in relation to service between 6 April be partly protected rights pension 1988 and 5 April 1997 must be 1997 and 5 April 2005 and partly other pension, or partly set up as an Increasing GMP must increase in line with guaranteed minimum pension Annuity, that is an annuity increases in the RPI subject and partly pension accrued in that either increases at a rate to a maximum increase of 5% relation to employer and/or the of not less than 3% each year, each year, and first annuitant’s payments. If this or that increases in line with is the case, then different options the RPI, subject to a maximum > pension accrued in relation may apply or may have been selected increase of not less than 3% to service on or after 6 April for these distinct parts of an annuity. each year. 2005 must increase in line For example, one part may be a Fixed with increase in the RPI Where a guaranteed minimum Increase Annuity and the other subject to a maximum pension earned in relation to part may be a Level Annuity. increase of 2.5% each year. tax years between 6 April 1988 Similarly, the two parts may be and 5 April 1997 starts to be (iii) Compulsory requirements set up to increase at different paid before GMP date, the are minimum requirements percentage rates. guaranteed minimum pension The compulsory requirements does not have to be set up as set out above are minimum an Increasing GMP Annuity requirements and the relevant until the first annuitant reaches annuity may, if the provisions GMP date (see section D6 (i) for of the employer’s scheme so further information). permit or so require, be set up with higher increases. The rate of increase that actually applies will be shown on the Annuity Quotation. 18 Planning For Retirement (d) Optional bases for changes to (g) RPI-Linked Annuities An RPI-Linked Annuity will amounts of annuity payments An RPI-Linked Annuity will be fixed continue to be so linked for as long as for the first year and then (subject to the RPI continues to be published by Pensions which are not subject to the section D6 (j)) will change each year HM Government, and it remains the compulsory requirements described in line with yearly changes in the RPI. basis for determining the return on in section D6 (c), can be set up using If the yearly change in the RPI falls Government linked stocks. If the any of the bases described in section below zero and becomes a negative RPI is replaced by another index, D6 (a), providing they are permitted amount, the RPI-Linked Annuity whether based on UK or wider within the provisions of the will be reduced by the same European inflation, we reserve the employer’s scheme or the section percentage, unless a “negative right to adopt that index instead, 32 buy-out plan. This includes inflation” guarantee has been both for new and existing RPI-Linked protected rights pensions. selected for the annuity. If this Annuities or to make any other Once an annuity basis has been guarantee has been selected, changes or arrangements which we selected it cannot be changed, the RPI-Linked Annuity will not consider to be reasonable in the unless we have to change it fall in the event that the change in circumstances. Similarly, we reserve because we discover that it does the RPI falls below zero. the right to adopt a different index or not comply with the provisions of the make other reasonable changes or The yearly changes in the RPI-Linked employer’s scheme or the section arrangements if the RPI ceases to be Annuity will be determined at each 32 buy-out plan (see section D14). the basis for determining the return annuity change date. Subject to on Government linked stocks. In any (e) Date from which changes to section D6 (j), the new amount will of these circumstances, we will notify amounts of annuity payments normally be based on the change in the relevant annuitant if, in our take effect the RPI over the 12-month period opinion, he or she is likely to be If this section D6 applies, we will ending 3 months before the annuity materially affected. change the amount of each annuity change date. For example, if the at yearly intervals on the annuity annuity change date is in June, the (h) LPI Annuities change date. increase will be based on the yearly The new amount of an LPI Annuity RPI figure for March. A different will be determined at each annuity Where the annuity has been set up RPI period may however apply to change date and will (subject to to be paid “in advance”, the new the Policy if the trustees of the section D6 (j)) be linked to increases amount will be payable with effect employer’s scheme or the insurer in the RPI subject to a maximum from the annuity change date. of the section 32 buy-out policy percentage specified in the Annuity Where the annuity has been set up to have so requested. For example, the Quotation. In this case, the increase be paid “in arrears”, the new amount RPI figure may instead be based on in the RPI is based on the yearly will be payable with effect from the a 12-month period ending 2 months RPI figure for the September of next payment due under the Policy before the annuity change date. the calendar year immediately following the annuity change date. preceding the year in which the relevant annuity change date falls. (f) Fixed Increase Annuities For example, if the annuity change Subject to section D6 (j), a Fixed date is in October, the increase will Increase Annuity will be increased be based on the yearly RPI figure for by the percentage rate(s) indicated in September in the previous calendar the Annuity Quotation. year, not the September which has just passed. Planning For Retirement 19 (i) Increasing GMP Annuity As stated in section D6 (c)(i), where > This sum is then divided by 365. If an Increasing GMP Annuity is a guaranteed minimum pension The Annuity Quotation will indicate set up to have specified percentage earned in relation to tax years if the first increase or decrease will be increases each year, then the relevant between 6 April 1988 and 5 April proportioned. part of the annuity will, subject to 1997 starts to be paid before GMP section D6 (j), be increased with date, the guaranteed minimum (k) Income Choice Annuities effect from the annuity change date pension does not have to be set up Further conditions applying to by the percentage rate indicated in as an Increasing GMP Annuity until changes to amounts of payments the Annuity Quotation. the first annuitant reaches GMP of Income Choice Annuities are date. As such, the guaranteed set out in the Appendix, which is If an Increasing GMP Annuity is minimum pension may be set up issued where relevant. set up to increase in line with changes as a Level Annuity for the period in the RPI, subject to a maximum 7. Taxation from the annuity start date to percentage (not less than 3%) the first annuitant’s GMP date, and We will deduct income tax from any specified in the Annuity Quotation, as Increasing GMP Annuity payments if required by law and pay then the new amount will be thereafter. If this applies, the Annuity it to HM Revenue & Customs on the determined at each annuity Quotation will reflect the selected relevant annuitant’s behalf. change date. Where the annuity basis and the first increase to the change date falls between 6 April We are not liable for and do not guaranteed minimum pension will and 31 December, the increase in the deal with any inheritance tax arising be made with effect from the next RPI is based on the yearly RPI figure on payment(s) (if any) made under annuity change date following for the September of the calendar section D5 of the Policy, following the GMP date. year immediately preceding the first annuitant’s death. year in which the relevant annuity (j) Proportionate increase or change date falls. Where the decrease where first annuity We are not liable for and do not deal with annuity change date falls between change date is less than twelve any Lifetime Allowance Charge that 1 January and 5 April, the increase in months after the annuity start may arise in the event that the benefits the RPI is based on the yearly RPI date or first arrears date payable under this Policy exceed the figure for the September of the Lifetime Allowance (see section A2 (d)). Where the first annuity change calendar year two years before the date falls less than twelve months year in which the relevant annuity following the annuity start date or 8. Non-profit benefits; change date falls. first arrears date (as appropriate), surrenders; transfer of ownership the first increase or decrease made (a) Non-profit benefits under this section D6 may be Unless the annuity is an Income proportioned. Choice Annuity, the benefits The amount of increase or decrease arising under this Policy will not will be calculated as follows: share in the profits of any company in the Prudential Group of Companies. > We work out the full increase or decrease that would be due (b) Surrenders had the Policy been in force The benefits arising under this for twelve months following Policy may not be cancelled for a the annuity start date or cash payment or any other benefits. the first arrears date, (c) Transfer of ownership > We then multiply by the number The benefits arising under this of days that have elapsed since Policy are not capable of mortgage that date, or transfer to any other party except that: 20 Planning For Retirement (i) ownership may be transferred to 9. Production of documents 11. Notices to annuitants the extent necessary to provide and other evidence pension credit rights or to Each annuitant must give us an address comply with a pension sharing From time to time and before making any to which we will send any notices. order under section 28(1) of the payment we may need to see: These notices will be treated as having Welfare Reform and Pensions Act (a) the Annuity Quotation and/or been received by the relevant annuitant 1999 or Article 26 of the Welfare Statement of Benefits two postal days after posting (excluding Reform and Pensions (Northern Sundays and Bank Holidays). Ireland) Order 1999; (b) proof of the identity and right of any applicant for payment Changes in address need to be notified (ii) following the first annuitant’s to us promptly. death, a transfer of ownership to (c) proof that a person is still alive, the second annuitant or third if payment is claimed or due in 12. Changes to benefits and annuitant is permitted; respect of any pension payable amendment of policy conditions only while he or she is alive (iii) the Policy may be transferred (d) proof that a person has died, (a) Subject to sections D6, D8(c) (i), into trust for the benefit of all if payment is due on his or her death. D12(b), D12(c), D13 and D14, we annuitants, or if only one of will not change the amounts of them is alive, for the benefit benefits once they have come into of that annuitant. 10. Proof of age and marriage/ payment unless incorrect information civil partnership If any transfer of ownership takes has been provided by or on behalf place, each annuitant will become (a) Before we pay any benefit under the of the relevant annuitant or if the entitled to receive the annuity which Policy, we may require evidence of relevant annuitant fails to provide is payable for his or her life. A trust an annuitant's age and the age of any when requested information we under (iii) can make special provision other person for whom a benefit is require for the ongoing payment as to who is to benefit from any payable. If the age previously notified of benefits correctly. guarantee payments made under to us proves to have been incorrectly (b) Subject to section D12(c), we can section D5. Please note, however, stated, we will adjust the benefits to make changes to the terms of the that Prudential does not provide trust those that would have applied if the Policy providing we obtain the wording or advice on trusts, and the correct age had been given. We will relevant annuitant’s consent. annuitant should seek assistance from make any further adjustments that are his or her own legal adviser. required to collect any overpayments (c) We can add to, amend, modify or from the annuitant or pay any set aside any of the terms of the Guarantee payments may also be underpayments that were made Policy without the relevant the subject of a provision in the before the mistake was put right. annuitant’s consent in the first annuitant’s will. We do not pay interest on any following circumstances: adjustments that are made due (i) if it becomes impossible or to underpayment. unreasonable to follow them (b) If the first annuitant is married or because of a change in legislation in a civil partnership and a benefit or regulations. is payable to his or her spouse or civil partner, we may also require evidence of the marriage/ civil partnership. Planning For Retirement 21 (ii) if the basis of taxing Prudential 14. Annuity terms not in accordance 16. Financial Services changes. We will only change with provisions of employer’s Compensation Scheme the Policy in a way that is scheme or section 32 buy-out plan consistent with standard industry The Policy is covered by the Financial practice and allows the balance As stated in section A2 (c), we do not Services Compensation Scheme for the between the relevant annuitant accept any liability if the terms or options purpose of providing compensation in and us to remain as it was before selected for part or all of the annuity are the unlikely event of Prudential’s the change. not permissible within the provisions insolvency. of the employer’s scheme or the (d) We will, in any of the circumstances If a charge is imposed on us under the section 32 buy-out policy. It is the described in section D12(c), make Financial Services Compensation Scheme responsibility of the administrators/ only reasonable changes and give (or any other investor compensation trustees of the employer’s scheme or the relevant annuitant(s) reasonable scheme), we can pay for it by imposing the insurer of the section 32 buy-out notice, and will at all times take on our policyholders whatever level of policy to ensure that the benefits account of our obligation to treat charges is necessary and reasonable, purchased are permissible. our customers fairly. subject to complying with legal and If we discover that the terms or options regulatory requirements. As such, 13. Divorce and dissolution selected for part of all of any annuity are if such a charge is imposed in relation to not permissible within the provisions of the Policy we may make an appropriate If as a result of a divorce or the the employer’s scheme or the section deduction from benefits payable under dissolution of a civil partnership, 32 buy-out policy, we can change the the Policy. pension credit rights are awarded amounts and/or terms of the annuity. to an annuitant's ex-spouse or ex-civil 17. Third Party rights We can also make any adjustments partner or if an annuity payable under necessary to correct payments that have The first annuitant and any second this Policy becomes subject to a pension already been made. If, as a result of such a annuitant and/or third annuitant have sharing order under section 28(1) of the discovery, we find that the amounts of the directly enforceable rights against us in Welfare Reform and Pensions Act 1999 annuity payments already made need to respect of the benefits under the Policy or Article 26 of the Welfare Reform and be increased, we will make the necessary to which they are or become entitled. Pensions (Northern Ireland) Order 1999, payment, but we do not pay any interest Subject to this, nothing in the Policy we will make any necessary changes to in respect of the underpayments. confers or purports to confer on any the terms of the Policy to comply with those pension credit rights or that third party any benefits or any right to order. Such changes may include the 15. Applicable law enforce any term of the Policy pursuant reduction of any annuity in order to to the Contracts (Rights of Third Parties) The law of England and Wales applies to take account of payments that have Act 1999. the Policy and any disputes connected to be made to another party. However, with it will be settled in the courts of changes cannot normally be made to England and Wales. alter the options which were selected for the annuity as at the annuity start date. The trustees/administrator of the employer’s scheme or the insurer The effect of a divorce or dissolution of the section 32 buy-out plan on the second annuity is explained (whichever is appropriate), the first in sections D2 (k) and D3 (b). annuitant, the second annuitant (if any), the third annuitant (if any) and we agree irrevocably to submit to the jurisdiction of the courts of England and Wales. 1 6. Financial Services 22 Planning For Retirement E. Other Information 1. Complaints The Financial Ombudsman Service 2. Long-term business considers complaints as a free service We hope you will never need to, and your legal rights will not be affected The benefits arising under this Policy but if you ever wish to complain about if you subsequently decide not to accept are part of our "long-term business" any aspect of the service you receive its findings. within the meaning of the Financial from us, please first of all write to us at Services and Markets Act 2000. You or your beneficiaries can also Prudential refer any complaint to the Pensions 3. Pensions Business Customer Relations Unit Advisory Service (TPAS) which may Stirling This annuity is also classed as pensions be contacted at: FK9 4UE business under section 431B of the Pensions Advisory Service (TPAS) Income and Corporation Taxes Act 1988 Please quote any relevant Quote 11 Belgrave Road (as amended). The premium which the Reference or Annuity Reference number. London trustees of the employer's scheme or The Annuity Reference number can be SW1V 1RB the insurer of the section 32 buy-out found on the Statement of Benefits. plan paid to Prudential must relate to The telephone numbers of these If you are not satisfied with our response pension business in the way described organisations are: to your complaint, you may be able to in section 431B of the Income take the complaint to the Financial > Financial Ombudsman Service: and Corporation Taxes Act 1988 Ombudsman Service at: 0800 0234 567 (as amended). If we discover that this premium did not meet these Financial Ombudsman Service > Pensions Advisory Service (TPAS): requirements, we may modify the South Quay Plaza 0845 601 2923 Policy in whatever way is necessary to 183 Marsh Wall ensure that HM Revenue & Customs London does not impose any penalty on us. E14 9SR Planning For Retirement 23 www.pru.co.uk ANNM6466 04/2011 “Prudential” is a trading name of The Prudential Assurance Company Limited, of Prudential Annuities Limited and of Prudential Retirement Income Limited. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including life assurance, pensions, savings and investment products. The Prudential Assurance Company Limited and Prudential Annuities Limited are registered in England and Wales. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered numbers 15454 and 2554213 respectively. Prudential Retirement Income Limited is registered in Scotland. Registered Office at Craigforth, Stirling FK9 4UE. Registered number SCO47842. Authorised and regulated by the Financial Services Authority.