Zurich Plan (former Allied Dunbar)

Sarries1968

Dear All


I am hoping for a little advice to help me understand my annual review of a former Allied Dunbar plan now being operated by Zurich.


The statement I got today says that I have the following:


Managed AP 100%
SEDOL
0406181 Managed AP 332.47 units
0406200 Managed Capital AP 296.15 units
And that the current value of this is £53,836


But it also says that this Excludes 'Former Protected Rights Benefits'


Then the annual review states 'Former Protected Rights Benefits Only'


SEDOL
0406181 Managed AP 668.55 units
Total Current Value is £92,298


I no longer contribute to this pension as I have a work pension however I am 50 and was planning to take what is available when I am 55 to pay off whatever is left on my mortgage.


However - I have no idea what the above tells me and what it is likely to be worth in 5 years time??


I'd really appreciate some 'basic' advice on what it is likely to be worth when I am 55??


Thanks

dunstonh

I no longer contribute to this pension as I have a work pension however I am 50 and was planning to take what is available when I am 55 to pay off whatever is left on my mortgage.

That is not normally a good thing today. Most pension funds of medium risk or higher have returns in excess of the mortgage rate you are paying.

However - I have no idea what the above tells me and what it is likely to be worth in 5 years time??

No-one can tell you that for sure. You can ballpark it on long term averages but returns dont appear like that in real life. You could get a 15% growth next year. A 20% loss the following year, a 25% gain the following year, a 2% gain, then -4% loss.

Short term can zig zag all over the place. It generally takes an economic cycle to get you close to the long term average. An economic cycle is around 10 years.

I'd really appreciate some 'basic' advice on what it is likely to be worth when I am 55??

I think it is more important to actually consider whether the actual transaction is a good idea or not. Rather than a hypothetical amount you cannot predict.

Sarries1968

Thanks for the advice but what’s the difference the 2 amounts (£55k and £92k)?

Is is (today) worth one of those values or both??

Steve

dunstonh

it looks like one is for the non-protected rights (money you paid in plus tax relief) and the other is the former protected rights (from contracting out).

sandsy

There’s no difference any more. It used to be the case that protected rights had to be used to buy an annuity set up in a specific way. This is no longer the case. You can do what you want with the money in the same way as you can with the rest of the funds.

But pension providers are slow to change their systems so they still tend to quote it as if it’s some thing special and different when it’s not.

Sarries1968

Thanks Sandsy

So - assuming that the funds do nothing over the next 5 years (unlikely I know) when I am 55 will I have the ability to draw down all the funds in the scheme?

I thought as the Protected Funds amount was paid via my SERPs payments (until I took the decision to stop them and went back to the state run scheme - circa 2008) they would be held back and I wouldn't have access to them until I reached state retirement age?

My ideal would be to draw it all down and clear my Mortgage off.

Appreciate any / all advice

Steve

dunstonh

I thought as the Protected Funds amount was paid via my SERPs payments (until I took the decision to stop them and went back to the state run scheme - circa 2008) they would be held back and I wouldn't have access to them until I reached state retirement age?

no. One of the reasons for contracting out was to allow earlier payment of the income. Until 2006, you can take them at 60. However, now it is 55.

OldMusicGuy

FYI we just found out that my wife has had a small Allied Dunbar pension she forgot about. It's all in the Managed AP fund and has returned on average just over 4.8% per annum over the 22 years she has had it.

Sarries1968

Wow - that great news.

Once last question - is there a simple web site that I could keep tabs on these funds and how they are performing?

OldMusicGuy

There was until yesterday, here: http://webfund6.financialexpress.net/clientsv21/ZurichMyStatement/Widget.aspx?Brand=zuri&viewstate=600#

However, the link does not appear to be working today. Maybe it will be back soon.