| [s165(1), ‘Pension rule 2’][Para 3(1)(c) and (2), Sch 28] |
A
lifetime annuity contract may be guaranteed for a
set period of time, known as a term certain, of no more than ten
years. The
insurance company guarantees that payments will
continue under that contract for a given term even if the member
dies before that term has ended. The ten year maximum period runs
from the date the member first becomes entitled to that lifetime
annuity (the point the contract was purchased).
Guarantees are explained in more detail on
RPSM10104050.
The lifetime annuity contract may provide a ten year
guarantee even if earlier pension entitlements under the
arrangement were similarly provided with a
guarantee, for example under a
short-term annuity contract, or where entitled to
an
alternatively secured pension.
The contract may provide that any guarantee entitlement ends
on the recipient of the continuing annuity payments
RPSM09101810 deals with the taxation of those continuing term-certain payments.
| Glossary ( RPSM20000000) |
