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					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.

				
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