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With-profit scheme investment

Is the scheme invested in with profits?

With profits funds are pooled investments from which the fund provider’s costs are deducted. A proportion of the remainder (the profit) is paid to the policy holders in the form of annual bonuses.  There may also be a terminal bonus paid if the policy is held to term or a surrender value adjustment if the policy is terminated early. These products may be conventional or unitised/unit linked.
If you are unsure whether your scheme is invested, either wholly or partially, in a with profits fund and/or what specific conditions apply, you should check with the fund provider.

Guaranteed growth rate

Does the fund provider guarantee that, as a minimum, the fund will increase in value each year by a specific percentage?

Annual percentage rate

If different members have different guaranteed growth rates please indicate the range.

Guaranteed annuity rate

Has the fund provider guaranteed to use a specific rate to convert each member’s fund to a pension?

Any other guarantees

For example:

  • A guaranteed minimum value on the return of contributions
  • Specific commutation rates
  • Guaranteed dependent benefits
  • Loyalty bonuses/fund value rebates
  • Guaranteed minimum fund value at retirement

If yes, please provide as much detail as possible, including whether different cohorts have different guarantees and what they are in each case.

Are any penalties applied on surrender?

If the scheme were to be transferred, would any rights to accrued bonuses and/or terminal bonuses be lost through the application of a surrender penalty?

If yes, please provide as much detail as possible, including whether different surrender penalties apply to different cohorts and what these are in each case. In addition please indicate whether the fund provider reserves the right to impose a surrender value adjustment (usually known as a market value adjustment (MVA) or market value reduction (MVR)) and the level of adjustment that currently applies?