Prudential Pensions - MVR on pensions and transfer value

Icterinewarbler

esterday I called the Prudential to get  information, specifically for a transfer to another provider.  I just wanted to understand this option and have not made any decision.

I was provided a pension transfer value (which corresponded to what I was seeing online) and a confirmation of the MVR (Market Value Reduction) being zero.  

As I understand it, the MVR is a reduction in value in some circumstances.  This MVR on my policy has been zero for a while and it was confirmed on my statement last month and also on the call yesterday as still being zero.

I made no request for any changes to my policy yesterday.

However, in the evening I logged on to MyPru again and the value of the policy had suddenly dropped by approximately 10%.  So I called Prudential today I was informed that the MVR had suddenly increased since yesterday.  They also confirmed that as a result the transfer value is now about 10% less compared to yesterday.

I also noticed that the forecast tool on MyPru now estimates a policy value of less than half of what it was previously estimating, when entering a  retirement age less than 65.  For 65, it is estimating an expected amount similar to the overall value today.

My concern is that the changes to my policy and fund value appear (only my suspicion) to have happened after I called indicating that I was considering a transfer option.  It feels too much of a coincidence timing wise.  

Today, I asked Prudential to explain this but their told me that they can't provide this over a call and I must request a letter be sent to me, this is expected to arrive June 10th.

Does anyone else have this experience?  It feels wrong but I do not yet understand the criteria for the MVR calculation to be zero for so long and then suddenly 10% of the pension fund value.

xylophone

https://forums.moneysavingexpert.com/discussion/comment/74168003/#Comment_74168003

You've suffered from "the daily decision"?

Icterinewarbler

Thanks for the link to a previous discussion.

If I understand correctly, the MVR can be challenged and possibly put back to zero for a transfer.  I have asked Prudential to explain it, why their calculation criteria concluded the MVR was zero for so long and then suddenly after my call yesterday the same (assumed) criteria concluded the MVR was nearly 10% of the fund value.

dunstonh

However, in the evening I logged on to MyPru again and the value of the policy had suddenly dropped by approximately 10%.  So I called Prudential today I was informed that the MVR had suddenly increased since yesterday.  They also confirmed that as a result the transfer value is now about 10% less compared to yesterday.

Equities are high and they won't be triggering the MVR.  However, bonds are down again having wiped out their 2023 gains.

If you are in the high equities WP fund then you wouldn't expect an MVR.  If you are in the high bonds version, then an MVR would not be unexepected.

Icterinewarbler

It's a With-Profts Personal Pension Fund started back in 1989 (contracted out of SERPS).  On the yearly statement there is no information explaining where the funds are invested (whether in equities or bonds). 

My understanding (which I will check) is that on reaching the policy's "selected retirement date" then an MVR will not be applied, so I guess that I must wait a few years and look to transfer out to another provider on that date.  This is mainly motivated by the level of customer service that I've experienced with Prudential.  Obviously, I might be persuaded to change my mind based on the numbers in a few years time, i.e. staying with Pru versus transferring.

Icterinewarbler

This begs the question of whether to take the 10% MVR hit now to transfer out of a bonds-invested fund into equity-invested fund with another provider showing far better yearly returns?  My likely retirement age of 65 is 8 years away.  

JAXS1610

My policy dropped 15k overnight and would seem i am not the only one that this is happened to, I am in the middle of transferring my pension out but this seems excessive . My yearly statement i received in April had a MVR reduction but not to this extreme. 

Roger175

I have just come off the phone having sought a transfer value (35 min wait to speak to an operative, but hey-ho). The TV was broadly as expected and a relatively small MVR applied. I requested confirmation of the figures, which apparently can't be emailed and will be posted with a target date of 4th June.

I am almost certainly going to instigate a transfer, but can anyone advise how the process works - I will probably do this via A J Bell, but do you get a Transfer Value notified to you with the option to question it if, it's not correct, or does it just go ahead once you've made the request?

Thanks in advance

Albermarle

Has anybody had problems with Prudential pension values since the weekend system upgrade. — MoneySavingExpert Forum

Icterinewarbler

It appears that this was possibly a blip/issue in the MyPru platform/system because I have just logged in and the valuation appears to be back to where it was and the forecast estimates too. 
However, it's unclear because the MyPru platform does not show if there is an MVR in place (apparently it can change daily, or so I was told over the phone today).  If the MVR was added to MyPru online dashboard then no doubt it would take some pressure away from the customer service phone line.

Icterinewarbler

I spoke with their customer service today and the person confirmed yesterday was a system issue affecting the numbers shown for fund value and MVR.  Apparently all staff were supposed to be aware but the person I spoke to yesterday clearly did not and was telling me that the MVR on my policy had increased to about 10%.