RPSM09300030 - Scheme Administrator Pages: Member benefits: Pension benefits

Lifetime annuity contracts

As an alternative to a secured scheme pension you must offer the member the opportunity, otherwise known as an open market option, to purchase a lifetime annuity contract. You may of course be in a position of obtaining a quote from an insurance company you have close links with, and pass the offer on to the member for consideration, but they can reject it. However if the member fails, after a suitable timescale, to select a lifetime annuity contract of their own choosing, you may provide one on their behalf.

If they do decide to obtain a lifetime annuity from another source you must not pass the funds directly to the member. The member must tell you:

• what type of contract they want
• which insurance company they want to purchase the annuity with.

You will then be responsible for buying that contract from the relevant insurance company on the member’s behalf. The contract can be purchased either in the name of the scheme trustees or in the name of the member, as desired.