Pru Fund Performance - fund value confusion

ian16527

I am posting on behalf of a friend who is not tech savy or pension savy. The information I have is limited so bear with me.

He has had a Pru Fund pension since 1988, and has drip fed contributions since then. I don't know how much historically, but currently £50/month.

There is no mention of what fund he is invested in although a MVR is mentions so I expect its a with profits type and mentions a Final Bonus which states not guaranteed on last years letter

He has a retirement date of 1st Sept 2026 set.

The problem is that the values from last August's statement to this March is vastly lower.

August Value - March Value

Plan Value - £129203 - £84000

Final Bonus - £108966 - £44532

Transfer Value - £236608 - Total fund value - £128322

Last years letter mentions transfer value of the Plan + Bonus. This years has Total fund value of £128322 but this includes the final bonus, both of which are much lower than last year.

I know we have had a rough month investment wise but something seems wrong here as last year was a good year for the markets.

He does not use their online portal, or even mobile banking so cant get much sense out of him.

DRS1

I agree it sounds like a with profits policy.

You would expect the plan value to go up a little bit year on year (annual bonuses) with that sort of policy so the drop in that bit is very odd.

I am wondering if the policy was split in some way (eg contributions before a date in one part and contributions after that date in another part) and the March statement is for only one part?

Is the March statement linked to his retiring in September? Usually you only get statements once a year for that vintage of pension. Is it possible that he has different retirement dates for different bits of the pension?

Presumably there is a telephone number at the Pru he can call to ask.

ian16527

https://forums.moneysavingexpert.com/discussion/comment/81942067#Comment_81942067

I think the March statement could be due to the set retirement date as you say. The same date was on the August letter.

Yes he is going to ring them tomorrow with a bit of luck. He is 61 so may not retire but wants to get out of his current job, although I don't know why he set the date as this September.

I have advised going to see an IFA as he would not be able to manage a SIPP so needs a hands holding approach

Marcon

Why have a SIPP if he can't manage one? A non-SIPP personal pension would make more sense - or possibly an annuity? Given how long ago he took out the policy I wonder if it's a retirement annuity contract rather than a personal pension - possibly with an interesting guaranteed annuity rate?

dunstonh

He has had a Pru Fund pension since 1988, and has drip fed contributions since then. I don't know how much historically, but currently £50/month.

Prufund wasn't available in 1988. It was the Prudential With Profits fund back then.

August Value - March Value

Plan Value - £129203 - £84000

Final Bonus - £108966 - £44532

Transfer Value - £236608 - Total fund value - £128322

That is not possible. The plan value can only go up (unless you make withdrawals). The final bonus can go down as well as up but is reflected in the transfer value (which can go down as well as up but not lower than the plan value.

Some of these old plans were segmented. Could that be the case here and he is only looking at one segment and not all of them?

e.g. regular payments would go into one segment, transfers into another, contracted out into another and future tops up into one each time they topped up.

ian16527

https://forums.moneysavingexpert.com/discussion/comment/81942129#Comment_81942129

I don't think I said he should open a SIPP, quite the opposite just in case anyone suggested it. That's why I recommended going to an IFA and getting them to go through the options.

There are no details on the letters of actually what plan he has.

He would be more suited to an annuity.

The question is why the vastly reduced value or are we missing something