The basics

• The Trustee Buy Out Plan (TBOP) allows Trustees to provide their members with a buy out contract – either following the wind up of their occupational pension scheme or for securing benefits for members with short service.
• TBOP has been designed for use by Trustees of defined contribution (money purchase) occupational pension schemes. It cannot accept defined benefits, including GMP and Reference Scheme Test benefits.
• The plan accepts Protected Rights and Non-Protected Rights benefits (it can’t accept safeguarded rights).
• Each scheme member has their own individual plan, which means they can monitor the value of their fund.
• The plan has access to more than 300 funds including lifestyle profiles, passive and active funds managed by Legal & General and by external fund managers.
• The plan allows members to switch between funds at any time. Members can invest in either one lifestyle profile, or in up to ten funds, at any one time.
• Members can view details of their funds, notify us of any changes to their personal circumstances and change their investments online through ‘Manage Your Account (MYA)’.
• Income Withdrawal is available for members with larger funds (currently subject to a minimum fund value of £100,000 when benefits are taken).
• If the value of the benefits from all the Registered Pension Schemes of a member exceeds the Lifetime Allowance (LTA), the excess will be subject to a tax charge. The standard LTA for 2008/2009 is £1,650,000 but a member may be entitled to a Personal Lifetime Allowance in certain circumstances.
• If a transfer payment relates to a wind-up and represents the member’s full entitlement in a scheme, any Protected Tax Free Cash (PTFC) will be maintained after the transfer. (PTFC is an entitlement to more than 25% of the fund value as a tax-free sum cash in respect of a member’s pre 6 April 2006 benefits.)

The value of the units, which make up a member’s fund, can go down as well as up, so the value of a member’s fund is not guaranteed. It is particularly important to remember this if a member is close to retirement. Please remember that the money is tied up until retirement benefits are taken. Please view the other risk factors associated with this product.

 

Your options

• Trustees choose the Selected Retirement Age at outset.
• Trustees choose the funds for the initial investment. After this, members can switch to a fund of their choice if they wish.
• Members can choose a lifestyle profile that aims to reduce investment risk as they approach their Selected Retirement Age.
• Members will be able to take their benefits at any time between 50 and 75 (rising to 55 on 6 April 2010).
• Members can ask us to change their Selected Retirement Age at any time – this will then be reflected in their annual statement.
• Members can buy an annuity of their choice – either with Legal & General or any other annuity provider.
• There are no penalties or charges made by Legal & General for transferring the value of the pension plan to another provider.

Risk factors

All investments carry an element of risk. Please bear these points in mind:

• Once the cash equivalent transfer values (CETV) payments have been received and accepted by Legal & General they cannot be returned.
• The value of the benefits payable on the member’s death may be lower than those that would have been paid under the member’s scheme.
• The value of the units which make up a member’s fund can go down as well as up, so the value of their fund is not guaranteed. It is particularly important to remember this if a member is close to taking their benefits.
• We do not guarantee the growth rates used in our illustrations. If the actual growth rates are lower than those shown, the value of a member’s fund may also be less.
• The amount of pension income provided by a member’s fund will depend on a number of things, including investment returns and annuity rates at the time a member decides to take their benefits.
• The fund or funds members choose to invest in will have specific risks. These risks are described in our Portfolio Plus Funds Guide.
• If CETVs are invested in a fund that invests in property, it may be necessary to delay encashment during periods when property is not easily sold. The maximum delay is six months. This would not apply in the event of a member’s death. The value of property is generally a matter of the valuer’s opinion rather than fact.
• We can increase our charges. The members will be given prior notice of any such increase.
• The law and tax rates may change in the future.
• Past performance is not an indicator of future performance.