Hefty MVR being imposed by Phoenix Life

chipp

Back in the 1980s I contracted out of SERPS and chose to have the earnings-related part of my NICs paid into a with-profits policy managed by NPI. All arranged through the Halifax. Not much was ever paid into it because within a relatively short space of time I joined a firm who had a final salary company pension scheme. And now, as I'll be 60 later this year, I've received my "countdown to retirement" pack.

Because the fund is quite small, taking a pension from it isn't an option so they want to pay me off. If I choose to I can put the money somewhere to give me an annuity but they want to wash their hands of me. I've requested an appointment with PensionWise but it's still a few weeks away.

I've paid very little attention to it over the years. I have annual statements for most years which show demutualisation, restructures, changes of ownership and fluctuating fund values. In 2009 I received a letter which mentioned MVRs for the first time but said to check my policy document because MVRs don't always apply on retirement. The letter didn't give any clues about why they don't always apply.

I did a bit of online searching to see if I can find out the circumstances under which an MVR doesn't apply. No luck. What I did find is that there's a recently introduced 1% cap but this is on exit fees not MVRs which can apparently be applied in times of financial turbulence. I also discovered that the company currently managing my pension are getting a lot of publicity for all the wrong reasons.

Of course the policy doc is nowhere to be found, but the whole way through the illustrations have always been for retirement at 60 and there has never been anything to suggest that when I hit that milestone, the goalposts would have been moved. As a woman I've watched my state pension recede into the distance but although I'm peeved about it I understand why and at least I've not been paying anyone a fee to manage it for me!

At the time I took out the policy the retirement age for women was 60. Given that I've never actively agreed to anything other than taking out the plan in the first place and that it's no longer managed by the company I chose, also the base rate has been unchanged for eight years so we're hardly living in times of financial turbulence, do I have an argument that the hefty 35% MVR that they wish to apply because "the current value is greater than the fair share of the underlying investments" should be waived?

Linton

An MVR should only apply if you take the money before the end date defined in the pension. I suggest you ask Phoenix when that is. Just a month difference could be significant.

xylophone

You are sticking with the policy until your selected retirement date?

http://www.phoenixlife.co.uk/about-phoenix-life/transfers-and-mergers/2015-npll-policy-transfer/~/media/Files/N/NPI/pdf/content/Your_Guide_To_Retirement.pdf


We guarantee not to apply an MVR for claims made at your selected retirement date, or on earlier death.

Some of our plans allow this guarantee to apply at other dates close to retirement. If you change your selected retirement date, these guarantees may no longer apply.

Please contact us if you want further details of how this affects your plan.

Does the above have any relevance to your particular policy?

dunstonh

I did a bit of online searching to see if I can find out the circumstances under which an MVR doesn't apply. No luck.

MVRs cease at maturity (or scheme pension age in case of pensions) or when the underlying fund has returned to a position of profit. Death is another time MVRs are not applied. It is fairly generic across the board.

I also discovered that the company currently managing my pension are getting a lot of publicity for all the wrong reasons.

There are no known issues with Phoenix at this time. So, I don't know what you have been reading. Phoenix buy up dead, near death or closed insurance company books that are no longer wanted. On the whole, Phoenix do a very good job of improving the administration on them (can take a few years after they buy them for the changes to be seen though).

also the base rate has been unchanged for eight years so we're hardly living in times of financial turbulence,

You are joking arent you? The last decade has been one of the most turbulent in the last 100 years. The financial crisis is not over. It is on heavy medication and needs to be weened off it

do I have an argument that the hefty 35% MVR that they wish to apply because "the current value is greater than the fair share of the underlying investments" should be waived?

What makes you think that the current value is higher than the underlying assets highest point? The FTSE100 is not far off the same as it was nearly 20 years ago. Many of the old Phoenix WP books were bought from insurance companies that had to sell equities at the lowest point to avoid going insolvent and missed the recovery that followed. Then just as they started to increase equities again, along came a second major drop (you dont normally get two of that scale in such a short period).

chipp

That's my understanding too Linton, hence my concern. The end date has always been my 60th birthday. There has never been any correspondence about changing it.

And thank you xylophone, it's the first I've seen of that PL booklet with the important stuff on p11 about MVR (they've not sent one to me) but I note its date seems to be 2012 and I'm not sure whether it relates to my particular NPI plan, I need to go back over my paperwork to establish the various change of name/ownership dates. When I was blundering around on PL's website I found a link to a similar later-dated doc that made no mention of that guarantee, but can't find it now!

chipp

dunstonh, the stuff I read came up when I did a google search today on "MVR on retirement" but the articles on Phoenix were from a year or so back, I'm glad to hear they've got their house in order but I'm still flummoxed as to why they should be imposing an MVR in my case. And I'm not saying we're out of the financial crisis, what I meant was it seems to be less of a rollercoaster now, sorry I didn't make myself sufficiently clear. BTW I was quoting PL's own literature about current market value, hence the inverted commas.

It seems that Phoenix are actually doing an admirable job in the face of great adversity. Who'd ever have thought we could have a double dip and that people paid more than you or I could ever dream of could get things so wrong? Perhaps I should donate my tiny pension pot to Phoenix's coffers in order to safeguard shareholders' dividends :rotfl:

dunstonh

the stuff I read came up when I did a google search today on "MVR on retirement" but the articles on Phoenix were from a year or so back, I'm glad to hear they've got their house in order

Are the articles genuine media articles or just forum style posts from people not happy?

Phoenix have a number of different businesses running based on the old insurance company. So, when referring to Phoenix, it is always best to mention the legacy company name. Any reference to Phoenix without knowing the old legacy company is just pointless information. Remember the internet is full of whingers and moaners. Some have valid concerns. Others are just moaning about things they do not understand and there is nothing wrong at all.

ffacoffipawb

dunstonh wrote: »

Are the articles genuine media articles or just forum style posts from people not happy?

Phoenix have a number of different businesses running based on the old insurance company. So, when referring to Phoenix, it is always best to mention the legacy company name. Any reference to Phoenix without knowing the old legacy company is just pointless information. Remember the internet is full of whingers and moaners. Some have valid concerns. Others are just moaning about things they do not understand and there is nothing wrong at all.

The original company is NPI, mentioned in the first post.

It is part of the Phoenix Life Group and is administered by Diligenta.

msallen

ffacoffipawb wrote: »

The original company is NPI, mentioned in the first post.

The question is not the legacy company behind the OP's pension, but behind all the apparent negative things she has read about (generic) Phoenix.

bigadaj

msallen wrote: »

The question is not the legacy company behind the OP's pension, but behind all the apparent negative things she has read about (generic) Phoenix.

Don't think it is.

dunstonh

The NPI side of Pheonix is operating well and actually better than when Pearl were running it (in their AMP ownership days).

The OP mentioned NPI in the post but most times people just say Phoenix. So, if reading elsewhere, it means nothing if the Phoenix "articles" are about say, Scot Mutual.