AMP NPI's new range of single-charge individual and bulk S32 and S32A contracts alongside single-charge Cimps and group AVCs is a significant move to dominate the transfer and pension restructure market. The range can accommodate guaranteed minimum pensions and protected rights – a major advantage compared with some ranges.
I also like its approach to breaking the link between the GMP and with-profits. Rather than accepting GMP based on relative size to the transfer and forcing a percentage into with-profits to cover the liability, each transfer is tested and allocation reduced (individual contracts) or annual charge increased (bulk plans) to cover the liability. Thus, the whole transfer can be invested in the full fund range rather than the traditional percentage in with-profits.
Individual S32s may have the allocation reduced by up to 15 per cent to cover the GMP liability. Annual charges range from 0.75 per cent for nil commission through to 1 or 1.25 per cent for commission options. Commission ranges from 3.6 per cent with no trail through to 0.6 per cent with trail.
For bulk S32s, GMP liabilities are pooled and underwritten for the whole scheme, meaning some non-viable individual transfers get the benefit of the GMP liability being cross-subsidised. Terms differ for individual contracts. Allocation is fixed at 100 per cent and the GMP liability is covered by increased retention of the annual charge.
The break of the GMP link to with-profits is innovative and means the company has put itself in the frame for every potential new scheme. Still no solution for S148 orders – wishful thinking?
Ashley Clark is a director of Roberts Clark