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What pensions can be transferred into Synergy?
Pension transfers into SYNERGY can be made from most forms of UK tax-approved pension schemes, including: • occupational pension schemes, both defined contribution and defined benefit
Transfers from a defined benefit pension scheme cannot be made if pension has already commenced from that scheme. Please note that it is not possible to transfer State pensions such as the Basic State Pension or the State Earnings Related Pension / State Second Pension. Just because it is possible to transfer a UK pension does not necessarily mean that it is advisable to do so. Independent financial advice should be taken by any individual in connection with any pension transfer, and special consideration should be given in particular when contemplating transfer of pensions from either a defined benefit scheme or from a pension policy with guaranteed annuity options, when pension transfer might be inadvisable. Please ask your independent financial adviser for advice.
How is my Synergy pension fund invested? Investment management can either be self-directed by the member or delegated to an investment manager. Investment can be made into any of the following asset classes:
As SYNERGY is an “open-architecture” scheme, insurance policies and investment funds can generally be selected from any product provider. The above list of investments is not exhaustive. Other forms of investment are permitted by agreement. Bespoke investment arrangements require the prior agreement of the Trustee and Administrator, and special charges may apply. Please note that investment in residential property is not permitted in any circumstances because of HMRC regulations applicable to UK tax-relieved pension funds, including QROPS. For avoidance of doubt, neither the Trustee nor the Scheme Administrator provide investment advice. Responsibility for investment decisions and investment performance rests with the member or the member’s appointed investment adviser. The value of investments and the income from them can go down as well as up, and may be affected by fluctuations in exchange rates.
1. Conditions apply.
What benefits are paid at retirement? SYNERGY is a defined contribution pension scheme, which means that the amount of benefits received by a member, in the form of pension and retirement lump sum, is entirely dependent on two things:
Therefore there are no guaranteed retirement benefits of any form. Retirement benefits from SYNERGY can be taken by a member not earlier than age 50 (which increases to 55 from 6 April 2010) and not later than age 75. If however, the member is in ill health, benefits can be taken before age 50 (or age 55 from 2010). The member’s pension in retirement is provided via drawdown, which means that each year a proportion of the member’s fund is drawn down and used to provide the pension. Pension payments will typically comprise the investment income on the member’s fund together with a small return of capital. Therefore it is to be expected that a member’s fund will gradually reduce after retirement, through the effect of pension payments to the member. The amount of pension, i.e. the rate of drawdown, is flexible within limits set by the Guernsey Income Tax authorities. The Scheme Administrator will be able to advise you prior to retirement of the range of permitted pension drawdown in your individual situation. The amount of pension payable to you is normally reviewed every 3 years in line with the investment return achieved by your SYNERGY fund. If your fund earns more than assumed, this can result in an increase to your pension; if your fund earns less than was assumed, this can result in a reduction to your pension. Failure by a member to implement the recommendations of any regular pension review, or sustained poor investment performance, could lead to a member’s SYNERGY fund running out before their death. In addition to a retirement pension, SYNERGY members can opt to exchange up to 25% of their SYNERGY fund for a retirement lump sum. The taking of a pension can be deferred at the member’s choice until no later than the member’s 75th birthday.
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