L&G transfer to ReAssure

KenK68

I have a pension currently with L&G, this pension will be transferred to ReAssure on 6/4/2020 provided that the various courts give approval.
I have been logging into the L&G website to keep abreast of the information as it is posted, that also allows me to check the value of the pension.
Until the 19/3/2020 the actual value and the transfer value were almost the same £20 - £30 difference between them, on the 19th that difference changed to just under £11,500.
If I transferred the pension to another company then I would expect there to be a cost but that is not the case, this move is L&G's idea and customers have no say, so clearly I have a concern.
I e mailed L&G to ask for an explanation, if and when I receive a reply I'll post it here.
I would suggest anyone else in the same situation checks their valuations if they have not already done so,
All the L&G paperwork stated that customers would not suffer a loss as a result of the transfer, I intend to keep them to that statement.
Ken

dunstonh

If I transferred the pension to another company then I would expect there to be a cost 

Nowadays, that is not a safe assumption.   There could be a cost but many plans do not have an exit cost.

 this move is L&G's idea and customers have no say, so clearly I have a concern.

The pension is not being transferred though. It is being retained on exactly the same terms and same policy number and same staff, computers, offices etc.   It is just the logo in the corner that will change.     Then in the years ahead, Phoenix (who will end up being the ultimate owner) will look at ways they can consolidate.

I would suggest anyone else in the same situation checks their valuations if they have not already done so,

Valuations are totally unaffected by this.

All the L&G paperwork stated that customers would not suffer a loss as a result of the transfer, I intend to keep them to that statement.

There really is no need to be that paranoid.

Linton

How much in the account?  It is perfectly possible that your investments dropped £11,500 in the past week or so.

KenK68

Linton said:

How much in the account?  It is perfectly possible that your investments dropped £11,500 in the past week or so.

The actual value has not dropped only the transfer value.
The response I received from L&G was as follows:-
There is an MVR ( Market Valuation Reduction) in place. A link was supplied to explain what an MVR is.
That does not make a lot of sense L&G are transferring all these pensions to ReAssure so how can am MVR apply.
I have asked the question and again will post the reply.
As for paranoid, L&G tried once before to shaft me when taking a small pension which I had with one of my first jobs, sent me all the information but somehow completely forgot to mention the GMP which was worth a lot more than the figure they sent me. The adviser I spoke to even told me that the GMP did not apply for some reason which he had difficulty explaining, it did apply and I did receive it. Banks, Building Societies, Insurance Companies are in business to make a profit for themselves not for their customers.

dunstonh

That does not make a lot of sense L&G are transferring all these pensions to ReAssure so how can am MVR apply.

Your pension is not being transferred.   I think that is where you are making the mistake.  The pension is remaining exactly how it is.   It is the whole life & pensions book that is being bought by Reassure.  (who are being bought by Phoenix - so expect your rebranding to from L&G to ReAssure to Phoenix).

Thrugelmir

Transfer value is if your were to move the funds elsewhere. An MVR has most likely been applied due to the difficulty in accurately valuing the investments that underpin your plan. Markets as you may have seen are extremely volatile currently. 
The investments will be transferred to Reassure to manage, 

KenK68

I am aware that the whole life and pensions book is being bought by ReAssure and that provided it goes ahead ReAssure is being bought by Phoenix. That is the point MVR's apply when an individual either transfers his / her pension to another provider or decides to take the pension earlier than originally planned. The reason is simply to ensure that other pension holders are not unfairly penalised by the removal of those funds.
In this case all the book is being bought by ReAssure so everyone's pension will move at the same time so no one will receive different treatment, assuming it goes ahead, the courts are still to decide.
It is possible that they have applied an MVR in case anyone decides to leave prior to the 6/4/2020 but if so then why not answer my questions.

dunstonh

It is possible that they have applied an MVR in case anyone decides to leave prior to the 6/4/2020 but if so then why not answer my questions.

No it is not.   

Asghar

dunstonh said:

That does not make a lot of sense L&G are transferring all these pensions to ReAssure so how can am MVR apply.

Your pension is not being transferred.   I think that is where you are making the mistake.  The pension is remaining exactly how it is.   It is the whole life & pensions book that is being bought by Reassure.  (who are being bought by Phoenix - so expect your rebranding to from L&G to ReAssure to Phoenix).

Do you have any past experience to know if the actual price of each unit will change after the transfer, or as you say it will simply be a rebranding of the name.?

If the unit prices were to change then it would mess up the percentages on my excel worksheet.

dunstonh

Do you have any past experience to know if the actual price of each unit will change after the transfer, or as you say it will simply be a rebranding of the name.?

Nothing will change except the logo in the corner of the letterheads/statements.  

Over time, Phoenix will look to see if they can integrate it onto their software and there may be some funds that overlap with theirs and they may combine funds.  e.g. if Reassure have  a UK index tracker and Pheonix have a UK index tracker then they will at some point look to consolidate into one.

However, these things are very slow.  Phoenix bought Pearl Assurance in 2003.   Yet today, they still operate out of the old Pearl Centre in Lynchwood and the layout of all the documents is exactly the same as it was in 2003.       Phoenix has offices in other places around the country in the same old life offices of the companies they bought running much the same software using the same staff.    In some cases, they cannot consolidate software easily as its not cost-effective to do so.   So, they run them separately.  If they can consolidate the software then they may do so but it will not happen overnight.

The transfer of the book to Reassure and then Phoenix will not have a penny impact on the unit prices.

Asghar

dunstonh said:

Do you have any past experience to know if the actual price of each unit will change after the transfer, or as you say it will simply be a rebranding of the name.?

Nothing will change except the logo in the corner of the letterheads/statements. 

The transfer of the book to Reassure and then Phoenix will not have a penny impact on the unit prices.

Thanks.