Help understanding old pension plan

dunstonh

Pot B will be a V1.  Pot A may be a V2.  Does the policy number start with a 9 or a 5?     You don't see many unit linked Pearl plans.  The vast majority were with profits.

In the current statements from Phoenix it's called Prosperity Pension Plan Unit-Linked, which is made up of Former Protected Rights (the whole of this pot). 

100% former protected rights means it was contracted out funds only.  No contributions made.

Consumer3

@dunstonh Both plans start with 805

xylophone

Pot B, start date April 1993, then missing paperwork until a 1996 statement calling it Prosperity Pension Plan (Protected Rights). 

https://www.drewberryinsurance.co.uk/pensions-advice/faqs/what-are-protected-rights-pensions

This is now just a DC pension. There would seem to be no reason why it should not be transferred out to a modern plan.

When he checks his State Pension Forecast a COPE is shown?

Pot A, start date Jan 1994 called Pearl Pensions Mixed Fund, this is the plan he is still contributing to. The contribution, monthly policy fee and capital unit obligation increasing each year in line with NAE (Index of National Earnings).

This?

https://www.trustnet.com/factsheets/P/pl17/pearl-mixed-unit-linked-pn/

dunstonh

Consumer3 said:

@dunstonh Both plans start with 805

The ones that start with 8 are rare beasts.   I have only seen them with their FSAVCs previously.   Pearl only used the unit linked fund option for limited periods as it was traditionally a with profits company.  

Consumer3

dunstonh said:

Consumer3 said:

@dunstonh Both plans start with 805

The ones that start with 8 are rare beasts.   I have only seen them with their FSAVCs previously.   Pearl only used the unit linked fund option for limited periods as it was traditionally a with profits company.  

Hmm, I wonder why that was. Either way there doesn’t seem to be any reason to keep the two Pearl/Phoenix ones, no rights to be protected, but at least we’ve gained an understanding of it! 

Yes there’s definitely a COPE amount showing on his state pension, along with the message that he cannot pay in any more to improve it. Will double check though. 

xylophone

Hmm, I wonder why that was. Either way there doesn’t seem to be any reason to keep the two Pearl/Phoenix ones, no rights to be protected, but at least we’ve gained an understanding of it! 

It would be interesting to know what he decides to do about his pension.

Yes there’s definitely a COPE amount showing on his state pension, along with the message that he cannot pay in any more to improve it. Will double check though. 

COPE is to be expected as he was contracted out for a period.

It was used once only in the calculation of his "starting amount" for NSP.

When he looks at his forecast, what is shown as the amount accrued up to 5/4/22?

Consumer3

@xylophone
So it actually says he has one more year to contribute then he will get full State Pension. £185.15 is the most he can get. COPE estimate £20.05 a week.  

I’m sure the original forecast a couple of years ago said he couldn’t increase the amount but I must have been mistaken. 

Consumer3

Thought it best to add to this thread for background.

After not getting far with phone staff at Phoenix Life we tried the secure message route to gain some understanding. They have replied with a letter through the post and we don't fully understand the answer.  Hopefully someone could shed some light please?  The letter they sent doesn't appear online and you are not able to 'reply' to the initial query.  

We asked why there was an exit charge on one of the two policies (one is marked as 'paid up'), the other he is still making contributions to. We also asked if they can explain the charges fully. 

Reply from PL:

"We confirm no penalties or exit charges will be applied on transfer.

The annual management charge applied to this plan is 4% on capital units, and 1% on accumulation units.

Initial regular premium allocation rate and type of unit allocated - For Ordinary Rights policies, 102% of all regular contributions received will be used to purchase units. During the first two years an amount equal to twice the annual contribution at commencement must purchase capital units. From then on capital units are only purchased to cover each increase in the level of regular contributions.

Subsequent regular premium allocation rate and type of unit allocated - When the capital unit obligation has been satisfied contributions will be used to purchase accumulation units. However, any obligation to purchase capital units must be met before accumulation units are purchased.

Allocation rules on single premiums - 100% of single contributions received will be used to purchase units. No capital unit obligation arises in respect of single contributions.

Allocation rules on other types of contributions - For former Protected Rights policies, 99% of the contributions received will be used to purchase units."

We don't understand their use of percentages!  Plus an early exit charge is still showing online for the main policy.

xylophone

• Your relative appears to have one  ex  Pearl single premium policy (paid up?) and one to which he is still contributing (the main policy)?
  
  You have confirmation in writing that no exit charge will be levied on a transfer out - you should get them to explain why an exit charge still shows on line.
  
  Did you have a look at link cited by Marcon
  
  https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/pension-scheme-charges
  
  under 

  Initial units, capital units and accumulation units

  
  With regard to the percentages, multiply the percentage by the gross contribution (which will include tax relief)?
  
  Similar to  what is described here on p35?
  
  https://www.countrywideassured.co.uk/media/lr4dehpf/1973-executive-retirement-programme-terms-and-conditions-1223-v2.pdf
  
  At all events,  the pearl/Phoenix seems an expensive and inflexible arrangement.
  
  Your relative is now aged around 50 with a tiny SW pension ( auto enrolment with former employer: and the ex Pearl above ) so his
  
  retirement provision seems rather modest.
  
  Time to consider transfer of SW and Pearl to a modern plan and contribute as much as possible?
  
  You describe him as self employed but is he actually employed by his own company?  This can make a difference to how he contributes to his pension.
  
  https://www.ajbell.co.uk/pensions-and-retirement/pensions-explained/pensions-self-employed
  
  https://www.unbiased.co.uk/discover/tax-business/running-a-business/contributing-to-your-pension-via-a-limited-company-explained
  
  He could consider consulting an Independent Financial Adviser if he is not confident about the way forward.
   
  
  

Consumer3

@xylophone
Yes exactly this: 'Your relative appears to have one  ex  Pearl single premium policy (paid up?) and one to which he is still contributing (the main policy)?' Together around £120k
Plus the tiny SW one. £5k
No a sole trader rather than his own company.
Yes the link from @Marcon was useful thanks.

Thanks for sharing the Countrywide doc, I've looked at Page 35 but I'm still none the wiser on how the percentages work, I will go through the old Pearl docs again but I don't remember seeing anything about this. 

We will definitely try another message to PL to ask why the charge still shows online, he definitely wants to transfer all pots to something modern.  

PL responded by post but they don't upload it online. So we have to do a completely new secure message with the original questions and their letter added as a file, very long winded way to get answers from them!