Section 32 buy-out bond
A section 32 buy-out bond is a pension designed to allow pension benefits to be
transferred from another scheme whilst preserving some benefits under the old
tax and allowance rules rules.
Pension transfers are available to anyone who has retained benefit in a pension
scheme; for example, an employee who leaves service after an employer has
discontinued a pension scheme, or a self employed person transferring benefits
from a retired annuity policy.
The value of the preserved benefit from the old pension
arrangement is transferred into an individual Pension Transfer Plan to provide a
retirement benefits at retirement. The plan is on the policyholder's own name
and is completely independent of any employer
Where the transferring scheme was contracted out of the SERPS or S2P on a
defined benefits basis and this guarantee is required to continue under the
Pension Transfer Plan, the buyout option will guarantee to provide at least the
guaranteed minimum pension (GMP).