PRU Pension

DE_612183

xylophone said:

My wife took out a pension many years ago when she was still working ( think it was sort of opting out? ).

See

https://www.which.co.uk/money/pensions-and-retirement/state-pension/what-was-contracting-out-a581c3l1kqf4

From what you have said it would seem likely that your wife chose to "contract out" of SERPS into a personal pension.

Has your wife obtained a state pension forecast?

https://www.which.co.uk/money/pensions-and-retirement/state-pension/what-was-contracting-out-a581c3l1kqf4

Is a COPE shown?

Thanks Xylophone - Yes I think my wife to "contract out" - Her forecast shows she has got about 33 years and the option to buy a couple more to get to the full amount.

Not sure what COPE is - there is mention on the statement of "non-protected rights" and "former protected rights" 

Mothman

Comparing a With-Profits pension over a short time frame such as 1yr isn't ideal as the WP fund will be subject to a smoothing process. i.e some profit is held back from good years to cushion any fall in bad years, so you really need to compare over a longer time frame.

I also have a Pru With Profits pension (apprx £152k) and since early March 2012 it's up 93% after costs which isn't too bad, probably not quite as good as a popular multi-asset fund such as VLS60, but then the ride has been smoother. I always find there is a significant lag between what happens to prices in the market versus movement in the Pru WP fund which makes short term comparisons difficult. Also how increases in the Final Bonus payment are handled just seems to be a process of smoke & mirrors as I have never been able to get a grip as to how they are allocated. Regarding costs, my last statement in March showed total charges of 0.94% whereas the previous year they were 0.34% so they are not consistent.

I continue to hold my Pru WP pension as I think it offers something different (i.e a large allocation to real estate, overweight UK equities etc.) compared to what I hold elsewhere, but I do keep a close eye on it's performance. However I only have 4yrs left to my selected retirement age at which point I will probably transfer out to my main SIPP which is already in drawdown, this will reduce overall costs and avoid any possible Market Value Reduction on the WP fund.

xylophone

there is mention on the statement of "non-protected rights" and "former protected rights" 

On the statement from your wife's pension provider presumably.

Re PR and NPR

https://www.aegon.co.uk/support/faq/Understanding-our-products/retirement-products/pension-contributions/What-is-non-protected-rights-npr-protected-rights-prp.html

Former protected rights

These are the part of your pension funds that were built up from contracted-out contributions that were paid into your pension plan. These funds were a result of contracting out of the State Second Pension (formerly the State Earnings Related Pension Scheme (SERPS)) under this or a previous plan. The ability to contract-out stopped on 6 April 2012, so no further protected rights funds will have built up since then.

On 6 April 2012, all protected rights funds were converted to 'ordinary rights' and are now treated in the same way as non-protected rights.

Non-protected rights

These make up the rest of your personal pension fund under your plan. They are built up from pension contributions made by you, and/or your employer or transferring similar contributions to your plan from another pension plan.

Re COPE

See https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service#:~:text=Pension Equivalent amount.-,The Contracted Out Pension Equivalent ( COPE ),had not been contracted out.

The COPE was used once only  (6/4/16) in calculating your wife's starting amount for new state pension.

DE_612183

Thanks @xylophone
I've just looked at the State Pension Forecast and in addition to the £185pw, there is also a COPE amount - which I presume would equate to something on the Pru Statement.( the COPE figure is £12.87 pw ).
The Pru statement has (NPR) of £222 and (FPR) of  £858 - which don't reconcile back to the COPE amount - but it may not be uptodate?

dunstonh

I've just looked at the State Pension Forecast and in addition to the £185pw, there is also a COPE amount - which I presume would equate to something on the Pru Statement.( the COPE figure is £12.87 pw ).

COPE is an artificial figure.   It won't equate to much on the pru statement.  However, the former protected rights is the contracted out money but you could take it out £12.87 pw if you wanted or 100% on day 1.    

The Pru statement has (NPR) of £222 and (FPR) of  £858 - which don't reconcile back to the COPE amount - but it may not be uptodate?

Non-protected rights have nothing to do with contracting out.  The former protected rights do but the £858 is an artificial figure using synthetic assumptions vs the COPE figure which is artificial.   In other words, don't try and match them up.

IN simple terms you have a pot of former protected rights able to take as you like vs what you may have got extra (but not necessarily) if you had remained contracted in.

Albermarle

Also how increases in the Final Bonus payment are handled just seems to be a process of smoke & mirrors as I have never been able to get a grip as to how they are allocated.

I think one of the reasons for the declining popularity of WP , is their opaqueness.

Mothman

Albermarle said:

Also how increases in the Final Bonus payment are handled just seems to be a process of smoke & mirrors as I have never been able to get a grip as to how they are allocated.

I think one of the reasons for the declining popularity of WP , is their opaqueness.

Couldn't agree more.