MVR (Market Value Reduction) - it all feels deliberately evasive

Icterinewarbler

• When calling the customer service for my pension plan, I am informed that if I draw on my pension plan (via transfer, drawdown or other) before the selected retirement date then an MVR can be applied to the value of my plan, reducing its total value.

• When asking what is the criteria by which the MVR is calculated, I get no answer.

• When asking what is the current MVR, I am told it is zero but I am also told it changes on a daily basis so it could be much higher tomorrow.

• When asking how I get visibility into its amount each day, I am told it is not shown on the customer dashboard, only the transfer value is shown (before any MVR is applied).

• When asking how I can be sure a transfer is only actioned if the MVR is zero or low?  I am told that the only way is to phone on the day that the transfer will be actioned to ask and cancel if I'm not happy about it.

• When requesting if I can attach a condition at the start of a transfer request by which the transfer is only actioned if the MVR is zero or a low percentage, I am told this is not possible but I can monitor it myself and cancel the transfer if I am not happy with the MVR (but the only way to monitor it is to call every day).

It all feels wrong and lacks transparency.  

dunstonh

When asking how I get visibility into its amount each day, I am told it is not shown on the customer dashboard, only the transfer value is shown (before any MVR is applied).

Transfer values include MVRs.

It all feels wrong and lacks transparency.  

Its not really any different to unit linked funds, shares or other assets that can go down as well as up on a daily basis.  Except it is less likely to be lower because of the smoothing.

e.g. FTSE100 is down 0.27% currently.  If it finishes the day down, then tomorrows unit prices on UK large cap will be lower than today.   So, if you had a UK large cap fund, your would get a lower transfer value tomorrow.

With the WP fund, the MVR only kicks in if the underlying fund becomes less than the unit price.  However, due to smoothing, that would likely require a large drop to occur.   Not just normal daily movement.

It all feels wrong and lacks transparency.  

WP funds are generations of date now.  They are a yesteryear way of doing things.  Predating consumer technology and comes from the days when people didn't transfer their pensions.    That doesn't mean they are all bad.  There are some WP gems out there.  However, to expect modern disclosure standards on a legacy investment style that is no longer available is a bit like complaining that your 30 year old black and white TV doesnt show things in colour.