A few months ago, Royal London wrote to a number of plan holders who had previously taken out a pension arrangement with Scottish Life. If you were one of these, you may recall the letter.
It didn’t affect everyone, but it did impact upon those who had a Guaranteed Annuity Rate (GAR) attaching to their plan.
GARs were designed to ensure that you received a minimum annuity rate from your pension fund value at retirement. Generally, GARs provide a greater level of certainty and a higher level of retirement income than you could get from a pension plan without one and typically the rate would be higher than the standard annuity rates offered by alternative providers on the open market.
Royal London wrote out and asked those affected to make a choice about exchanging the GAR benefit for an immediate increase in value of the plan with them. A planholder meeting took place on 23 October 2018 and the voting deadline has now passed, with the majority voting for the Scheme.
This means that Royal London asked the court to approve the Scheme at a sanction hearing which took place on 12 November 2018. The court approved the Scheme and Royal London are increasing the savings of those affected. The GAR benefit was removed with effect from 11.59pm on 7 December 2018 and anyone affected can expect a letter from Royal London confirming the outcome of the meeting and sanction hearing (and what that means for your arrangement) in January 2019.