subject: Why The Open Market Option Is A Good Idea [print this page] Why The Open Market Option Is A Good Idea
The Open Market Option also known as OMO is a law brought into law for the protection of people about to retire. Most of the time the annuity payments offered by pension providers in a pension plan is in adequate so the OMO has been put in place to give them the option of looking elsewhere for better plans. The OMO was introduced in 1975 as a form of protection for people in pension schemes.
Most people ignore the open market option but it is there to help pensioners earn more than most pension providers offer. When shopping around there is the potential to get more annuity payment, about 20-30% and even more if you have a medical condition. The OMO puts the pensioner in control and gives them the choice and the power.
The whole idea of the OMO is to choose a competitive annuity and get the best deal out there but most people ignore it which is a bad ideas because those who do can lose up to 40% extra income.
The OMO It is always worth exploring as there is always another provider offering to pay a higher than what your provider is offering. People with Enhanced or Impaired Life Annuity get higher incomes so it is a good idea to use the competition out there to your advantage, to get the best deal possible.
Pension Income Choice Association (Pica)is currently doing a lot to get pension regulations changed and also make most people aware of the options available to them. They are trying hard to make people of retirement age aware of the Pension Income Choice Association (Pica) and how it could help them.
When it comes to pension schemes the more information you have the better; get information about the scheme's investments, amount it pays out as well as other benefits and then make a decision. If you are not satisfied with the quote you have been given, you can use the information you have as a yard stick to measure and compare other offers to.
After gathering the information given by your pension provider, you can use it to compare and contrast with other schemes on the pension market. This way you can choose the option that works in your favour; whether you stay with your existing provider or decide to go with a new one, it is always good to know what is happening in the pension industry.
Most pension providers try to discourage people from taking the OMO option but it is your legal right so do have a look around. Once you have made a final decision and bought the annuity, you cannot change the provider or the annuity type so always make sure you have perfectly OK with your choice.
Just make sure that you understand the OMO and get the key points involved which is that an enhanced or impaired annuity will increase your annuity by at least 10%. There are other factors involved as well should all be considered carefully considering your future income will be determined by the type of annuity you purchase.
Despite all its advantages the Open Market Option (OMO) is still ignored by most, which is what regulators are trying to get the people to be take what is already 0n the market and if anything compare it for the best prices. When It comes to OMO, your futures hang in a balance so decisions have to be made wisely.
