Monday, January 21, 2019
The information below has been provided by Prudential. For further details please visit their website
One of the features of the With-Profits fund is that any customer in the Nottinghamshire Local Government Pension Scheme who invests in With-Profits has a guarantee that a Market Value Reduction (MVR) will not be applied to the value of their plan in certain circumstances, for example, on their death or if they take their benefits at normal pension age.
For more information on MVRs please click here.
Our With-Profits guarantee charge is increasing
Following a review of the cost of providing this guarantee, we’ve decided to make the following change:
- For all new applications we receive on or after 15 March 2019, the guarantee charge we’ll apply over the lifetime of your member’s plan is currently no more than 4% of any payment from their With-Profits fund.
- For applications we receive before 15 March 2019, the guarantee charge we’ll apply is currently no more than 2%.
The above charges may vary if, for example, the long term mix or type of assets held within the With-Profits Fund is changed.
New applications only
This change affects new applications we receive on or after 15 March 2019. There’s no change for existing With-Profits investors.
Being fair to all our With-Profits investors
The cost of providing the guarantee has increased due to the low interest rate environment. The rules for with-profits funds state that new applicants should have no adverse effect on existing investors. This change enables us to charge a fair amount to each group.
There’s nothing you need to do. We’ll make this change from 15 March 2019.
If you have questions or need more information, please contact your Prudential Client Manager or our Corporate Pensions Team.