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Lincoln introduces menu-style pension plan

Lincoln Financial Group has brought out a menu-style retirement plan comprising an individual personal pension, an unsecured pension plan and a unit-linked annuity.

The plan took over a year to design and was influenced by Lincoln’s expertise in the US market.

i2Live accumulator, the personal pension element, allows clients to consolidate the majority of their pension assets under one plan. Premiums are invested into a range of 68 internally and externally managed funds from the likes of Fidelity, New Star, Jupiter and Schroders. This range selected with the help of Old Broad Street Research.

Clients have the option for phased conversion to i2Live drawdown – the unsecured personal pension – and i2Libe annuity without additional cost. They can continue investing in the funds they have selected.
i2Live drawdown provides flexible income up to age 75, while i2Live annuity provides an income for life, with a range of death benefits available to suit dependents’ circumstance.

An income guarantee option is available on both the unsecured personal pension and annuity products. The income guarantee can apply to all or part payment and is calculated according to a maximum supportable income, which is the annual income that the product can reasonably provide for life.

This is calculated at the outset, taking into account the value of the fund, client’s age, gender, an assumed rate of investment return, assumed charges and assumed life expectancy. The initial guaranteed minimum income is 75 per cent of the maximum supportable income at the outset and can increase during five yearly reviews.

The guaranteed income feature is useful because the minimum income will still be paid of the value of the whole fund drops below the guaranteed minimum income level. It also eliminates the problem of a client outliving their income. However, selecting the income guarantee will limit investment choice due to the maximum 70 per cent equity exposure.


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