MetLife has significantly expanded its distribution network with an exclusive six-month contract to become the first fixed-term annuity provider on The Open Market Annuity Service (TOMAS).
Its innovative Freedom Income Plan (FIP) is now available on the platform which enables clients and advisers to make the most of pension savings by considering all retirement income options.
The deal, which started from January 1st, is a major step forward for MetLife in its drive to grow the fixed term annuity market which it forecasts to double, taking it to a value of more than £1 billion a year by 2013.
TOMAS, which has its roots in the defined contribution occupational scheme trust market, works with a wide range of distributors including Lloyds Bank, Mercer, Origen and Bluefin providing systems and services aimed at improving the way they deal with annuity customers.
Its decision to partner with MetLife on fixed-term annuities is an important recognition of the change in the annuity market and the need for clients and advisers to look at the widest possible range of retirement income options.
Dominic Grinstead (pictured), Managing Director of MetLife UK, says: “Our partnership with TOMAS underlines how the retirement income market is changing and the need for more innovation and flexibility.
“It demonstrates that major players in the annuity market recognise that fixed-term annuities have a major role to play in retirement income and that the industry as a whole has to focus on growing the market.”
Graeme Riddoch, Sales & Marketing Director of TOMAS, says: “Part of the TOMAS strategy is to deliver a full range of retirement income products to our platform customers. We are delighted to be working with MetLife and the decision to prioritise Fixed Term Annuities reflects the growing interest in this type of product.”
MetLife’s FIP includes the innovative Freedom Clause giving clients the flexibility to transfer to another retirement product during their selected term should they become ill and qualify for enhanced terms on a lifetime annuity, or if the dependant attached to the plan should die.
It offers clients a known fixed income plus a guaranteed maturity amount at the end of the selected term. Clients can choose either a level income or an incremental annual rise of up to 8.5%. There is also a choice of death benefits with clients able to choose a lump sum payment or income continuation until the end of their chosen term and the return of the guaranteed maturity amount.
Minimum investments are £20,000 after taking a pension commencement lump sum with a choice of terms running from three to 25 years.
MetLife saw rapid growth last year taking just nine months to double its assets under management to £2 billion by September 2011 from £1 billion at the end of November 2010.