Pru with profits pension matured - anyone

YaniB_2

Hi guys.
Just wondering if anyone has a with profits pension with the Pru that has matured recently.
My question is did the final pay out live up to expectations (final bonus etc) and did it broadly reflect your last 3 or 4 annual statements.
Thanks
YaniB

dunstonh

Just wondering if anyone has a with profits pension with the Pru that has matured recently.

What version?

My question is did the final pay out live up to expectations (final bonus etc) and did it broadly reflect your last 3 or 4 annual statements.

Final bonuses accrue as you go along. So, you can tell what final bonus you have to date on most of their plans. It doesnt suddenly jump up unless it is an old conventional with profits plans from 80s or earlier with a basic sum assured.

YaniB_2

Hi Dunstonh
Not sure what you mean by what version
On looking at my statements it's a with profits personal pension and the money is invested in the With Profits Cash Accumulation Fund
It was started around 1992
You say the final bonus cannot suddenly jump up but in
Going by the statements it may or may not be paid at maturity depending on how well the fund is performing at the time of maturity
That's what concerns me. Can they suddenly drop the full value of the fund right at the end of the term ? Hence my original question to see what occurred when others reached maturity. Ps sorry for delayed response on this. Thanks YaniB

dunstonh

Not sure what you mean by what version

There is more than one Pru WP fund. Also, the returns will vary with the different contracts. Pru had a number of versions over the years.

You say the final bonus cannot suddenly jump up but in
Going by the statements it may or may not be paid at maturity depending on how well the fund is performing at the time of maturity
That's what concerns me. Can they suddenly drop the full value of the fund right at the end of the term ? Hence my original question to see what occurred when others reached maturity. Ps sorry for delayed response on this. Thanks YaniB

It can jump up if you happen to time it just after a bonus increase following a good year. However, the actual event of maturity does not usually see a jump up as the information on final bonus accrued to date is available (on all but the oldest plans). So, it has a daily value.

The final bonus can certainly drop and drop to zero. Just as they did in the dot.com crash and the credit crunch for many people. Final bonuses are not guaranteed. That is why so much of the return is the final bonus nowadays rather than the annual bonus (which is guaranteed once added).

If you ask Pru what your transfer value is and the current value, you may well find that the transfer value is higher. That is because the transfer value will include final bonus to date. The current value usually does not (with pru that is. Others vary).

YaniB_2

Is it therefore worthwhile transferring out before maturity to avoid a sudden drop. There is at present no MVR . 2015 statement showed a transfer value of
36k excl final bonus
Estimated final bonus 18k
Transfer value 54 k.
Market value reduction = 0

Plus protected rights value
25k excl final bonus
Estimated final bonus 14k
Transfer value 39 k
Market value reduction = 0

Would you transfer this out now just Incase the final bonus takes a plunge at maturity ?
Would I lose any final bonus from the above figures if I did.

Just slightly nervous that at maturity these figures nose dive

Mothman

I have a Pru WP pension (series 2 ex Scot Am) . As mine has a 4% bonus guarantee and 10yrs till maturity, I have decided to hang on to it. Whilst I could transfer out with no MVR there is nothing to say that the fund I transferred into would not also suffer similarly whenever the next crash comes. Well that's my view anyway.

dunstonh

Is it therefore worthwhile transferring out before maturity to avoid a sudden drop. There is at present no MVR . 2015 statement showed a transfer value of

Yes. It can make sense sometimes to switch out whilst a final bonus is high. Providing you dont go into an equity fund in its place.

Would I lose any final bonus from the above figures if I did.

If you had a conventional with profits plan, you would suffer. If its unitised you would not.

YaniB_2

Thanks guys.
These things are rather confusing when you are not that familiar with all the terminology. It sounds like I would be better to seek out a good independent adviser.
I would not access any of this until five years on but feel I want to be clued up and ready if and when the time comes. Don't want to leave things to the last six months and then feel rushed into a decision.
Anyway thanks for all the advice.

parcival

Wife had a Pru plan that matured on her 60th birthday last August. It had a GMP component. Pru admitted that they lost money on it as the fund amount no where near covered the GMP that they were obliged to pay. They made no attempt to prevent the payout and no attempt to use the non GMP portion to support the shortfall of the GMP.


At the time the final bonus was very good so she was very happy with the way they dealt with it all.......

mikehy

I had a Pru personal pension plan that was in the with profits fund. My Pru retirement date was due on Feb 1 this year and because of the fall in shares in the previous months, like you, I was concerned the final bonus would fall from the total I had from the July 2015 statement. I contacted the Pru about the position regarding the final bonus but they were non committal at the time.

Because of the Xmas period I was delayed in getting advice from an IFA and so the transfer out, which I had opted for, didn't happen till March. I was thinking because of the delay I would be penalised by the final bonus. However in the end the final transfer value was higher than in the pack statement I received before Xmas and July 2015 so I was pleased.

YaniB_2

The last two postings are very interesting to me. I too have another pension bond 32 with pru. It has a guaranteed min pension of around 6850 @ 65 . This pension also has a redress value due to me being wrongly advised at the time to move cash our my company pension (I had taken voluntary redundency). This is sitting at 40k right now. I was told by the pru they could not use any of that to buy the gean teed pension. Ur posts seem to back that up. Also pleased to see the final bonus on the woth profits pension did not plummet when u decided to teaser out. This was what I was trying to find out from other policy holders. Did pru play fair at the policy end stage ?. Cheers guys.