Prudential not telling me Pension Fund Value

forzarobur

Not drawing Pru pension but just started getting state pension

dunstonh

Pru don`t sell these policies anymore and I can`t find anybody who knows anything about them.

They were abolished with the introduced of personal pensions in 1988. Every IFA out there knows about them.

or the last ten years, my £500 annual premium has produced a bonus of approx £9 pa added to my pension.

Quite normal with plans with good guarantees. The value is in the benefits guaranteed.

One of the things the FOB is looking at.

The FOS does not have the remit to do that.

What did Pru say in response to your complaint? (I am assuming you made a complaint as you don't have access to the FOS until you use the complaints process at Pru).

woolly_wombat

dunstonh wrote: »

The value is in the benefits guaranteed.

Some questions for you:

1. Are you time-limited re the guaranteed benefits?
   
2. Do they need to be taken on, or within a month, of your maturity date?
   
3. Should you be focussing more on the guaranteed benefits and less on the final bonus?

dunstonh

Are you time-limited re the guaranteed benefits?

In most cases you just have to reach the age in question but in a very small number of cases, there is a limited window to act on. Our template letter requesting details asks if there are specific dates or restrictions to any safeguarded benefits have to be taken. I would suggest anyone with a safeguarded benefit does the same.

Do they need to be taken on, or within a month, of your maturity date?

Semi-linked with above answer. However, you have to achieve the age to get the benefit that ties in with that age. This doesn't mean you have to wait until after that age to start the process. However, it does mean you need to make really sure the provider is aware that you want to take benefits from your 65th (or whichever it is).

E.g. provider gets forms two weeks before, goes into the work queue. A few days later, it is allocated to a staff member and they start processing it on that day. If you are 64 and 362 days old that day, you will get age 64 rate. If the paperwork clearly shows age 65 is the commencement age then it will be put back into the workflow for that.

Nowadays, insurance companies are generally much better on their forms and a commencement date/age is on there. I always emphasise it on the cover letter to be sure (and to protect my backside).

Should you be focussing more on the guaranteed benefits and less on the final bonus?

nine times out of ten (on this type of plan), the benefit is more valuable that the transfer value. The transfer value includes the final bonus. You typically find that on plans which have good guarantees that the value is never realistically going to achieve pay little or no bonus.

Getting the transfer value is important. The final bonus amount is not important as you are comparing the benefits to the transfer value.

forzarobur

my IFA doesn`t seem to know about them.
If the final bonus amounts are negligible why on my original illustration on taking the policy out do they show the bonuses will be 150% of the final guaranteed pension.eg guaranteed bonus plus annual bonuses £5400, illustration shows final bonuses will be in region of an extra £8000 on top. Am I being thick or something.

sandsy

forzarobur wrote: »

my IFA doesn`t seem to know about them.
If the final bonus amounts are negligible why on my original illustration on taking the policy out do they show the bonuses will be 150% of the final guaranteed pension.eg guaranteed bonus plus annual bonuses £5400, illustration shows final bonuses will be in region of an extra £8000 on top. Am I being thick or something.

The bonuses shown in an illustration are not guaranteed but just a projection based on what the pension provider thought were possible reasonable rates of return at the time.

In practice, rates of return have been much lower than expected so bonuses will be lower.

dunstonh

If the final bonus amounts are negligible why on my original illustration on taking the policy out do they show the bonuses will be 150% of the final guaranteed pension.eg guaranteed bonus plus annual bonuses £5400, illustration shows final bonuses will be in region of an extra £8000 on top. Am I being thick or something.

Providers gave example projections based on assumptions that seemed reasonable for the day. Back in the 80s, you would quadruple your money in 10 years. Now you aim to double. The economy has changed. The way we invest has changed. Inflation has changed. Life expectancy has changed. The assumptions of the 1980s are nowhere near suitable for the 2010s.

Its a bit like saying when you opened a savings account you were getting 5% interest. Now you are only getting 1%. Things change.

You took this plan out before 1988. That was before regulation. The various regulators increasingly changed the rules on solvency. Especially after dot.com period when so many insurers closed their doors.
Plans with something guaranteed must mean guaranteed. That means putting solvency above returns. So, if the insurer can meet its liability, it will invest in a way that is ultra cautious and low return. Many had to make this change after the stockmarket crash of the early 2000s and never benefitted from the recovery.

Its an old product that an adviser would almost certainly have recommended you transfer out of years ago had it not been for the guarnatees.

my IFA doesn`t seem to know about them.

Is it an IFA or FA? Every type of adviser should know about them generically. These Pru plans follow very close the generic type. An FA would have little or no experience of them specifically but you would expect an experienced IFA to know a bit more. Especially as the Pru themselves are very good and keep a record of the main terms and conditions of all their legacy plans online for IFAs to read.

I will repeat my earlier question as you appear to have missed it. What did the Pru say in their written response to your complaint?

forzarobur

The Pru have basically said, although initial final bonuses alluded to an amount of 150% of final pension amount, the performance of my policy over the 32 years has resulted in a final bonus of 0.04%. On a £100,000 fund this equates to £40.
And they wonder why I am complaining.

dunstonh

forzarobur wrote: »

The Pru have basically said, although initial final bonuses alluded to an amount of 150% of final pension amount, the performance of my policy over the 32 years has resulted in a final bonus of 0.04%. On a £100,000 fund this equates to £40.
And they wonder why I am complaining.

So, this plan probably does have guarantees on it given the time period. What are they?

Linton

forzarobur wrote: »

The Pru have basically said, although initial final bonuses alluded to an amount of 150% of final pension amount, the performance of my policy over the 32 years has resulted in a final bonus of 0.04%. On a £100,000 fund this equates to £40.
And they wonder why I am complaining.

You had a pension that provided guaranteed benefits, possibly very generous benefits compared with what would be justified these days. You chose to remain in the pension. Pru is now, presumably, ready to provide those benefits it guaranteed.

What is there to complain about?

Perhaps if you told us the pot size, the guaranteed pension and, as Dunstonh suggested, the transfer value, people could give you an assessment. The pot size may be totally irrelevent.