Britannic Retirement Solutions, formerly Evergreen Retirement Assurance, is setting up a fully transparent “21st Century” with-profits annuity with a 1 per cent annual management charge.
BRS claims the product deals with concerns over the clarity of with-profits annuities raised in a recent report by the Staple Inn Actuarial Society, the London branch of the Faculty & Institute of Actuaries.
BRS is aiming to remove the lack of transparency of conventional with-profits annuities by giving policyholders ann ual statements outlining how the fund performed and disclosing the amount reserved for smoothing and charges.
The new annuity also features an annual audit by an independent actuary to double-check the fund is sticking to the rules.
Corporate development director Bob Bullivant argues that IFAs cannot match clients' risk profiles with their required returns on a with-profits annuity without being fully aware of returns and deductions.
Bullivant says: “The opaque nature of current generation products is unacceptable in the 21st Century.
“We have engineered this product to remove the smoke and mirrors, meaning consumers can buy this product confident that we cannot raid their funds for our own purposes as is the case with other with-profits annuities.”
Annuity Direct managing director Stuart Bayliss says: “This is good news. We have argued for greater transparency for a long time as with-profits annuities can leave policyholders vulnerable to the whims of actuaries.”