ReAssure (ex L&G) Pension

[UpTheIron]

Wife has a variety of pensions from different jobs over the years; one of which is a ReAssure pension that was previously L&G.

It appears to be a 'With Profits' fund and the latest statement refers to two different figures:

1. Fund (Unitised-With Profits FPF2 Pension Accumulator Series 01)
2. 'Final Bonus' as at 5 February 2021
... and finally a 'current value' that is a sum of the two.

The most recent paperwork is also pushing a move to a lower-fee tracker fund.

She's no longer contributing to this pension, and can't access it for at least 15 years or so.

Is it a good place to leave the money? I haven't dug into performance over the last few years yet, nor what the current charges are but on the face of it, it was a few percent behind Vanguard LS100 for example.

[Mr Pointy]

I was in the same position but much nearer to the maturation date so I let it run until it matured & the final bonus was released. For you it's more a case of if the fund will perform better if you move it elsewhere or leave it & get the bonus. To do that you'd have to put some work in to get past statements & see what the performance is like.

The bonus might be valuable but it might not overcome 15 years of rubbish performance. Have you asked them for a Transfer Value?

[UpTheIron]

Thanks. Seems I was already thinking along the right lines.

Mr Pointy said:

I was in the same position but much nearer to the maturation date so I let it run until it matured & the final bonus was released. For you it's more a case of if the fund will perform better if you move it elsewhere or leave it & get the bonus. To do that you'd have to put some work in to get past statements & see what the performance is like.

A cursory glance makes me think it would do better elsewhere, need to do some deeper analysis.

Mr Pointy said:

The bonus might be valuable but it might not overcome 15 years of rubbish performance. Have you asked them for a Transfer Value?

Question asked, not responded yet.

[Mr Pointy]

Check carefully for any other benefits such as a GMP or guaranteed annual increase in pension which might be valuable, but they are a bit unlikely. I have them in one of mine but it is a S32 policy which may be different to yours.

[992_GT3]

UpTheIron said:

Mr Pointy said:

To do that you'd have to put some work in to get past statements & see what the performance is like.

A cursory glance makes me think it would do better elsewhere, need to do some deeper analysis.

The with-profit option will typically be a lower risk, lower return option. If you did some analysis between the 1st half and 2nd half of 2020, I'm sure you would find that the with-profit fund would have outperformed over the 1st half and underperformed over the second half (and over the combined period).

If you have a long investment horizon and don't care about the volatility then you can probably target higher returns by moving the money, although you will lose some of the smoothing benefits etc. There may also be other beneficial options with the policy that could be worth hanging onto.

[NickCQ]

UpTheIron said:

The most recent paperwork is also pushing a move to a lower-fee tracker fund.

As a general rule if an insurance company is pushing you into a different product there's a high likelihood you are in a legacy product that has features that have become expensive for them in a low interest rate environment. I would check very carefully that you are not sacrificing a high guaranteed / minimum rate of return.