The Pensions Regulator

Member retirement options

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Governance

Trustees should be familiar with their scheme rules and should know and understand the scheme provisions dealing with the payment of pensions.

The open market option allows the individual to have choice over the annuity provider.

Scheme rules may define some aspects of the process such as:

• how benefits are to be secured if the open market option is not used (eg by purchase of an annuity or annuities);
• allowing the member (or dependant) to make choices (eg to take part of their benefit as a retirement cash sum, to have an annuity that increases year by year and/or (in the case of a member) to have an annuity that continues to a spouse or dependant after their death;
• how the benefit will be secured if the member (or dependant) does not respond to communications;
• the fact that the open market option is available and what steps the member (or dependant) needs to take in order to exercise it, including any time limits that apply; and
• provisions relating to the cost of advice to the member (or dependant) (eg if the trustees incur costs, the rules may give them the power to recover those costs from the member’s fund).

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