The Government has tabled amendments to the Finance Bill currently before Parliament to remove a serious difficulty faced by members of money purchase arrangements wishing to exercise their legal right to an Open Market Option (OMO).

Under the law as it stands at the moment, a pension commencement lump sum (PCLS) cannot be paid before the scheme either commences payment of the relevant pension or passes funds to the pension provider chosen by the member under the OMO. Inevitably, there are delays before the latter actually happens. The member has to be told the fund value, and then he or his adviser has to obtain and compare quotations from annuity providers, before finally giving the scheme his decision. The prospect of having no income while all this is going on deters retirees from exercising the OMO - the direct opposite of what the Government wants to happen (paragraph 4.20 of "the Annuities Market").