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  1. #1

    Aviva Section 32 Policy

    I'm trying to work out where I stand with respect to the lifetime allowance and am not sure I've correctly interpreted this Section 32 policy I have with Aviva.

    My last valuation letter shows a transfer value of 30,000. I'm assuming that this is the amount - along with any final bonus - that I could purchase an annuity with. So, first question - is the transfer value the amount I add to other DC plan values for the purposes of the lifetime allowance?

    My second question relates to a guaranteed minimum pension benefit incorporated in the policy. The GMP is stated as being 350 p.a., revalued at 8.5% compound for each year between when the policy was taken out and my NRA at the time, which will be 36 years. I think this makes the GMP value around 6,600 p.a.

    If I'm correct in thinking that the transfer value of 30k,even if bumped up by a decent final bonus has to be applied to an annuity, the GMP will be far more valuable. In which case, is it this I multiply by 20 to incorporate in my lifetime allowance calculations.

    If anyone can comment on the above I'd be really grateful.

  2. #2

  3. #3
    Thanks. The TV is 30,264.36. The GMP isn't given in the annual statement but I have the original policy document which says the GMP started at 351.68 p.a. but would be revalued at 8.5% compound from when I took the policy to my NRA which will be 36 years. I make the GMP 6,609 - the schedule I was given with the original policy says 6,631.

    I can't rely on the TV as each year the statement makes mention of a terminal bonus, but in the meantime the TV increases a small amount. Either way I'm not even clear if I can treat the TV as a DC amount.

    I agree that the TV and GMP seem miles apart but that's what I have in front of me. Just wondered what I should expect to get. I get the impression Aviva are not adding bonuses to the fund, and presumably will just pay the GMP.

  4. #4
    OH has a s32 Aviva policy (ex Norwich Union).

    The transfer value has always been very low relative to the GMP.

  5. #5
    I'd be interested in a solution to your query re the valuation for LTA purposes, something we are now grappling with also.


 

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