Understanding final bonus

Kinclad

Hi, I hope i can get some advice on a Standard Life pension from a previous employment, i am 54 years old.

The breakdown and values are as follows on these 2 dates :-

Value @ 5/12/18 - 05/12/23

Pension Millennium With Profits           - £15,892.14 - £17,409.01

Pension With Profits Fund                     - £8,896.99   - £11,057.82

S/L At Retirement (Multi Asset Univ)     - £2,653.38   - £0

S/L Managed Pension Fund                  - £46,034.61 - £115,559.02

S/L Multi Asset Mgd (20-60% Shares)   - £52,974.15  - £0

(the 2 funds that are now zero were closed and combined into the Managed Pension Fund in March of this year.)

Totals -
2018 - £126,451.27
2023 - £144,025.85

Its showing a final bonus fig of - £13,876.22
So a total transfer value of - £157,902.07
My current discounted fees are - 0.467%

So my questions if you can help are..

Was the merger of funds in March of this year due to a move to life styling and the presumption i would be buying an annuity when i retire at 65?

It regularly warns on the site that i have a valuable with profits pension and that i risk losing the benefit of this if i decide to move it, but am i correct in saying that the bonus only relates to the first 2 funds (ie just over 20% of the total funds)?

I guess im really trying to understand the value of the pension i have and if its justifiable to make any changes, ie move it to my current workplace pension or look at changing what I'm already invested in with SL.

The warning of losing the with profits benefit, makes me very wary of making any changes, but at the same time i have no idea how valuable it is.

I wouldn't be looking at an annuity at retirement, so if i were to not move this SL pension, would you say it makes sense to look at moving the current managed pension fund out of lifestyle (if I'm correct in that assumption).

I know that many decisions i need to make are based on risk etc, but at this time i'm just trying to understand exactly what i have with SL.

Many Thanks for any help.

Mark.  

Albermarle

It regularly warns on the site that i have a valuable with profits pension and that i risk losing the benefit of this if i decide to move it, but am i correct in saying that the bonus only relates to the first 2 funds (ie just over 20% of the total funds)?

That would appear to be the case. With Profits have an accrued Final Bonus, that in theory you could lose if you transfer it out before the age at which it matures ( usually 65) However in practice it seems that if you do transfer it the accrued final bonus comes with it ( mine did ). I think they just cover themselves in case you try to transfer out during a period of turbulent market conditions.

Was the merger of funds in March of this year due to a move to life styling and the presumption i would be buying an annuity when i retire at 65?

Why do think you are in a lifestyling product? Does it actually say that anywhere ?

If you are you need to ascertain what lifestyle product you are in . Traditionally they were aimed at someone planning to take an annuity, but there are also lifestyle products aimed at drawdown. What you do not want is to be in one aimed at taking an annuity when in fact you plan to drawdown.

dunstonh

Was the merger of funds in March of this year due to a move to life styling and the presumption i would be buying an annuity when i retire at 65?

Possibly.  If you have you lifestyling selected.   However, it seems strange to lifestyle them into the managed fund as that is higher risk.

It regularly warns on the site that i have a valuable with profits pension and that i risk losing the benefit of this if i decide to move it, but am i correct in saying that the bonus only relates to the first 2 funds (ie just over 20% of the total funds)?

a) its only the With Profits fund and not the millenium
b) its not that valuable.  Its a guaranteed minimum growth rate of 4% before charges.

I wouldn't be looking at an annuity at retirement, so if i were to not move this SL pension, would you say it makes sense to look at moving the current managed pension fund out of lifestyle (if I'm correct in that assumption).

There is no point lifestyling to an option you are not going to use.   However, it doesnt look like you have lifestyling any more.

Kinclad

Thanks for your responses.

So just checked back on the site and it does mention -

You're currently invested in a lifestyle profile

1. Growth stage – usually 10+ years from retirement

   Your money will be invested in funds that aim to grow the value of your pension pot over time.

2. Pre-retirement stage - usually when you're starting to approach retirement

   Your money will be gradually moved into funds that are usually lower risk and begins to prepare your money for retirement. This all happens automatically, so you don’t need to do anything.

3. At retirement stage - usually when you're only a few years away from retirement

   Your money gradually starts to move to funds that aim to make sure you're in the right investments for your retirement goal. Again, you don't need to do anything as this happens automatically.

Very broad descriptions on what the changes are, but emphasizes...'Its automatic...you don't need to do anything'. lol

Albermarle

Then the next stage is to follow my advice in the previous post.

If you are you need to ascertain what lifestyle product you are in . Traditionally they were aimed at someone planning to take an annuity, but there are also lifestyle products aimed at drawdown. What you do not want is to be in one aimed at taking an annuity when in fact you plan to drawdown.

OldMusicGuy

I transferred a SL with profits pension fund to my SIPP and got paid the full final bonus with no market value reduction. SL would not tell me how for certain much I would get until I actioned the transfer. I agreed with the provider that I was transferring the SL pension to that they would let me know the value of the transfer so that I could back out if SL were not paying the final bonus, or were applying a significant market value reduction. 

As it turns out when my SIPP provider put in the transfer request, SL quoted they would pay the full final bonus without reduction.