what is an open market annuity?

Answer 1

About your Open Market Option

Your pension fund will have built-up over your years of employment and as you get nearer to retirement age, you are faced with getting to grips with your pension options. One of the terms you may see mentioned is the Open Market Option.

Open Market Option (OMO) basically means that you are free to buy your pension annuity from a wide range of insurance companies, not just from the current company where your pension fund resides.

Answer 2

These are probably the three most important words in respect of your current pension policies. By having an ‘Open Market Option‘ (OMO), you have the ability to shop around to obtain the best annuity rates available in the market for your chosen circumstances. This is a major benefit as your current pension provider may not be offering you the best annuity income.

:)

Answer 3

Here's the bottom line;
Annuities are incredibly expensive. A rip off for most investors. The so called tax advantage is usually wiped out by fees, poor performance and distributions taxed as earnings vs. capital gains.

There are many professionals and law makers that are trying to make annuities illegal in pension funds. After all... why have an expensive, so called tax deffered investment in an otherwise inexpensive tax deffered program?
(sorry to deviate off the question a little)