Prudential AVC Final Bonus Calculation

Options
tacpot12
tacpot12 Posts: 8,028 Forumite
First Anniversary Name Dropper First Post
in Pensions, annuities & retirement planning
A friend has AVCs with Prudential as part of their Teacher's Pension. Friend is considering a partial withdrawal from their AVCs and is wondering how such withdrawals will affect the calculation of the Final Bonus.

I've seen dunstonh reply to other similar questions with the answer that the Final Bonus is accumulated over the life of the plan and wanted to just check I understood what this meant.

Does this mean that they will still receive some of the Final Bonus for the amount they have withdrawn and all of the final bonus for the amount they have not withdrawn? (With Profit investment via AVCs does not appear to be unitised according to the Performance Report from the Pru.)

Friend is aware of the potential for a market value reduction (MVR). I was wondering if there were any thoughts or knowledge about whether Prudential was applying MVRs in the current pre-Brexit maelstrom?

Many thanks
The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.

Comments

  • dunstonh
    dunstonh Posts: 116,548 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    edited 17 January 2019 at 8:50PM
    Options
    The final bonus can go up or down on a daily basis. So any final bonus accrued to date will not be affected by a UFPLS payment (which will use some of that on a pro-rata basis for the withdrawal)
    Friend is aware of the potential for a market value reduction (MVR). I was wondering if there were any thoughts or knowledge about whether Prudential was applying MVRs in the current pre-Brexit maelstrom?

    The vast majority of Pru plans are not currently charging MVRs and there is no pre-Brexit Maelstrom
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • tacpot12
    tacpot12 Posts: 8,028 Forumite
    First Anniversary Name Dropper First Post
    Options
    So relieved about the lack of maelstrom.

    Will let my friend know about the Final Bonus calculation; it's good news for them.

    Many thanks
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • Thomas2500
    Thomas2500 Posts: 3 Newbie
    Options
    My final bonus of £31,231.67 decreased to £25,624.70 on 15th march 2019. I just hope this is a short MVR. ;(
  • dunstonh
    dunstonh Posts: 116,548 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Options
    Thomas2500 wrote: »
    My final bonus of £31,231.67 decreased to £25,624.70 on 15th march 2019. I just hope this is a short MVR. ;(

    MVRs do not reduce the final bonus. They are entry of their own. The MVR would reduce the transfer value but it would not reduce the final bonus. So, if the final bonus has dropped, it means only the final bonus has dropped.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.5K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.7K Work, Benefits & Business
  • 608.7K Mortgages, Homes & Bills
  • 173.3K Life & Family
  • 248.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards