Understanding pension pot

Flugelhorn

Hi - I have a pension account that is labelled as "FSAVC -conventional with profits" - the latest statement give a guaranteed benefit or about 55K (including annual bonuses etc) - however the "Plan transfer value" is more like £150K 

Can anyone explain what these mean ie how much money is there for me in this?? -  I have asked the company on occasions and felt no wiser at the end

dunstonh

FSAVCs no longer exist.  They were reclassified as personal pensions in 2006.    Hwoever, some providers using old software still keep their original name.     So, effectively you have a personal pension.

the latest statement give a guaranteed benefit or about 55K (including annual bonuses etc) - however the "Plan transfer value" is more like £150K 

You are in a With Profits fund.  These come in multiple versions but keeping it simplified, you effectively have two elements.  The current value will show the value excluding final bonus accrued to date and minus any penalty.   The transfer value will show the current value plus the final bonus accrued to day minus any penalty.

The transfer value is the closest you get to a real value.  However, it may include a penalty that would not apply if taken at the scheme age.    Often older plans have terms that you do not get on modern pension plans.  So, there is also the potential for something of value not to be included in the current or transfer value.  For example, a guaranteed minimum maturity value or a guaranteed annuity rate.

Flugelhorn

Thanks for explanation @dunstonh .  yes there is a GAR. I think it is the idea of the final bonus that puzzles me - it is the idea that "yes it is worth X but you might not get it" . 

xylophone

With regard to the final bonus, there is usually a statement in the "bumf" that a final (terminal) bonus may be added but is not guaranteed.

What does your policy paperwork have to say on this point?

Flugelhorn

"we may also pay a final bonus when your plan ends, however this is not guaranteed and may change at any time"