GBST enhances Pension Drawdown functionality

GBST, provider of wealth administration software through its GBST Composer platform, has upgraded its pension drawdown offering, enabling clients to provide additional options to their customers at retirement.

Following demand from across their wealth management client base and wider market, GBST has enhanced its award-winning Composer platform with a drip feed drawdown capability and additional income flexibility options. The new functionality extends the existing proposition which combines the certainty of an annuity and the flexibility of drawdown in one simple tax-advantaged wrapper.

David Simpson, Head of EMEA at GBST, commented:

“Through the Composer platform, our clients can already support and administer different types of pension and savings products side-by-side. The new functionality gives advisers and end investors additional control over income payments, while continuing to enjoy the flexibility to blend pension investments, drawdown and guaranteed income and change the combination as required to meet an individual’s evolving lifestyle and financial planning needs.”

“This development further underlines our commitment ensuring both advisers and clients alike can benefit from the widest possible range of post pension freedom retirement solutions. We will continue to invest and work with our clients to innovate in this space.”

The drip feed drawdown capability will allow customers to set up regular payments from their pension savings at a frequency of choice.

Payment can be split between tax-free cash (the Pension Commencement Lump Sum or PCLS) and immediate income. For example, with a regular instruction to drawdown £4,000 each month, the investor can select to receive up to £1,000 tax free cash and an immediate income of up to £3,000. Any amount not withdrawn as tax free cash or income will be moved into the drawdown for investment.

Alternatively, the client can reduce the sum crystallised but still achieve the same income payment, for instance, they could elect to crystallise as little as £1,000 and draw £250 as PCLS with the remainder of £750 as income. This can provide an opportunity for future growth of the uncrystallised fund and hence potential for greater PCLS in future. In addition, with careful planning, this option can help ensure taxable income is kept within the basic rate tax band.

The instruction can be set up as part of the original application for the Retirement Account or at a later date. It includes the automation of the sale of assets prior to each regular drawdown to provide sufficient funds to pay the selected tax-free cash and income.

Additional income flexibility will enable investors to make one-off income requests online from an existing pension in drawdown.

Customers can select an immediate ad hoc income payment at the commencement of each drawdown (in addition to selecting a regular drawdown income) prior to the funds being invested.

Alternatively, customers can make one-off income requests online from an existing pension in drawdown. Where sufficient cash is not held to fulfil the payment, the investor can also provide an instruction for assets to be sold. The income payment will automatically be made once the sale proceeds have been received.

This new functionality continues to build on the extensive at retirement functionality within Composer and is available to all GBST clients in the latest release.