Stage 2 – Buyout

At the point of buyout, individual annuity policies are issued directly to members in the insurer’s name. This is a more significant step for members, as the scheme’s trust structure begins to fall away and the insurer takes over direct responsibility for paying benefits. Members need clear, reassuring communications explaining what is changing, what (if any) options or decisions they face, and what happens next.

Communication

Buyout announcement letter

Trigger/Timing On completion of transaction Audience All members Regulatory Driver TPR best practice

Communication

Transfer of administration and payroll to insurer

Trigger/Timing On completion of transaction Audience All members Regulatory Driver TPR best practice

Communication

Confirmation of benefits and Section 74 discharge notice

Trigger/Timing 3 months before discharge (where member options offered) Audience All members Regulatory Driver PA1995 Section 74 / Discharge of Liability Regs 1997

Communication

Special member cases:

  • AVC members (where applicable)

Trigger/Timing On buyout confirmation Within 21 days of implementation period start Audience AVC members Pension Sharing Order members (debtor and creditor) Regulatory Driver TPR best practice Pensions on Divorce Regulations 2000

Key messages at buyout:

  • Your pension benefits are being secured with the insurance company.
  • Your benefits are not being reduced.
  • You will receive a policy in your name.
  • Here is what happens next and what (if anything) you need to do.

Stage 1 – Buy-in

Stage 3 – Wind-up

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