The Equitable Managed Pension Plan

Find below answers to the most popular questions we get asked by Independent Financial Advisers on the Equitable Managed Pension Plan.

General information
With-profits fund
Transfer options
Taking retirement benefits
Death benefits
Contributions 
Switching investment funds


General information

What is the HM Revenue and Customs (HMRC) pension scheme reference for the Equitable Managed Pension plan?
The HMRC reference is 00605477RG.

Does the policy contain any Guaranteed minimum pension (GMP)?
No. There is no GMP liability under this policy.

Does the Plan have Guaranteed Annuity Rates?
No. There are no guaranteed annuity rates under this policy.

Is there commission payable under this plan?
We do not pay commission to independent financial advisers or any other third party.

Do you pay a loyalty bonus?
No. We do not pay a loyalty bonus.

Do you support the Origo Options pension Transfer?
We do not support this.

Does the Plan have a Guaranteed Investment Return (GIR)?
Most with-profits pension policies taken out before 1 July 1996 provided a GIR of 3.5%. This increases the guaranteed benefit over time. When a policyholder transfers their fund, they give up any future GIR. Further details can be found in policy documentation.

Do you have a leaflet with the key information about the Managed Pension Plan?
Yes. You can download and print our Managed Pension Plan General information Leaflet.

With profits Values
With-profits policies have a guaranteed value which is the minimum amount payable on retirement, maturity, death or at a time specified in the policy.  Your policy document sets down exactly when the guarantee applies.  The guaranteed value will increase by up to 3.5% pa.   If you take your investments at a time when the guarantee applies, we work out the amount we pay by looking at:

• your Policy Value, which depends on the type of policy you have, the amount of premiums you have paid and when you paid them, the investment returns on the fund, the costs and charges, and any other profits and losses from the Society’s business; plus  
• an amount which represents the share of capital that has been allocated to your policy and is payable when your policy is paid out.  

We compare the total of these two parts with the guaranteed value and pay the larger figure.   

If you take your investments at a time when the guarantee does not apply, a transfer value is payable.  This is calculated as the total of the Policy Value and the share of capital described above.  Depending on the Society’s financial circumstances at the time of transfer, this value may be reduced by a financial adjustment.  Currently, the financial adjustment is nil (0%).  Transfer values can go down as well as up.  

Further details on the with-profits fund including the asset mix can be found on the website in the Principles and Practices of Financial Management.

Unit Linked Values
When you take your investments, the amount will be worked out using unit prices applicable at that time and will be based on premiums paid up to that date.  Unit prices can go down as well as up. Unit-linked funds are managed by Aberdeen Asset Management.

  

With-profits fund

Where can I find information on the with-profits fund?
We publish "A guide to how we manage the with-profits fund". We also publish a more detailed document called the Principles and Practices of Financial Management (PPFM) which explains how the with-profits fund is managed. We also publish an explanation of the latest changes to the PPFM.

Where can I find information on the Equitable Investment funds?
We also publish guides for our unit linked funds and with-profits fund which provide information about the funds and their features.

Where can I find information on the with-profits asset mix?
The asset mix of the with-profits fund as at 31 December 2016 was:

  • Gilts                                56%
  • Corporate Bonds               22%
  • Short-term gilts & Cash     20%                                       
  • Other                                 2%
  • Total                               100%

In line with the Society’s investment policy, with-profits investments are mainly in fixed-interest securities.

Transfer options

Where can I find more information about the transfer process?
If you need more information about the transfer process, please go to the Transfer Options pages on our website.

How is the transfer value worked out for a policyholder with a unit-linked fund?
When you take your investments, the amount will be worked out using unit prices applicable at that time and will be based on premiums paid up to that date.  Unit prices can go down as well as up.

How is the transfer value worked out for a policyholder who has a with-profits policy where guaranteed terms apply?
Where guaranteed terms apply, we take the policy value plus capital distribution, compare it with the policy's guaranteed value, and pay out the larger amount.

Guaranteed terms apply in the following situations:
o You transfer to take your retirement savings immediately as an annuity
o You are age 75 or over

How is the transfer value worked out for a policyholder who has a with-profits policy where guaranteed terms do not apply?
Where guaranteed terms do not apply, we pay the policy value plus the capital distribution, reduced by any financial adjustment applicable at the time.  The current rate of financial adjustment is nil (0%).  This may change without notice at any time.

Guaranteed terms do not apply in the following situations:
o You transfer your retirement savings to take them at a later date, or as income drawdown and are under age 75

Is a financial adjustment applied to unit linked values?
No. For any unit-linked benefits, the bid value of the units is paid.

Do you apply a market value adjuster?
No. We do not apply a market value adjuster. We may apply a financial adjustment on the with-profits fund.
From 1 April 2014, the financial adjustment is 0%. This may change without notice at any time.

 

Taking retirement benefits

Where can I find out more information about taking retirement benefits?
For all information to assist you with the retirement process, please go to Retirement Options page on our website.
All your savings are taxable at your marginal rate as the tax-free part was paid (if required) when this policy was set up.

 

Death benefits

What benefits will be payable on death?
The fund is payable as either a lump sum or a pension. If the policyholder dies after their 75th birthday, any death benefits may be taxed. Please refer to the nomination form for details.

Who are death benefits payable to?
The rules of the scheme give Equitable Life some discretion to choose who should receive the proceeds of the policy. The policyholder may nominate who they would like the benefits to be paid to, and we would take this into consideration when deciding who should receive the benefits.  Please refer to the nomination form for details.

Is it a requirement to have a nominated beneficiary under the Plan?
No, but this policy does allow a policyholder to nominate a beneficiary (ies) to receive benefits on their death. Policyholders need to ensure that they keep us informed of any changes to their nominated beneficiary (ies).

Are there any additional death benefits payable under the Plan?
No

 

Contributions

Can contributions be paid into this Plan?
No.

Where can I find more information about charges?
We publish guides for our unit linked funds and with-profits fund which provide information about the charges.

 

What is the annual charge for the with-profits fund under the Managed Pension Plan?
 The annual charge for the with-profits fund is currently 1.5%. We deduct 1.0% annually for administrations costs (Annual Management Charge) and 0.5% to cover the cost of the guarantees given in our with-profits policies. These annual charge rates are not guaranteed.

What is the annual charge for the unit-linked fund under the Managed Pension Plan?
You can find out about the Annual Management charges on the individual funds in the unit-linked fund information section.

 

Switching investment funds

Where can I find further details?
We publish guides for our unit linked funds and with-profits fund which provide information about the funds and their features.

Do you charge for switching between funds?
Currently, there is no charge for switching funds, but we reserve the right to deduct a charge in future without prior notice. Unit-linked funds cannot be switched into with-profits.

Do you charge for switching out of the with-profits fund?
No. The with-profits fund available for switching will be the underlying value of the policy plus any Capital Distribution, reduced by the financial adjustment where the switch occurs before age 75.
The financial adjustment is currently 0%pa. 

Does switching out of the with-profits fund into unit-linked funds impact my Guaranteed Investment Return (GIR)?
GIR will no longer apply to any funds switched out of the with-profits fund. 

Does switching impact the capital distribution the policyholder will receive?
Switching out of the with-profits fund means that the policy will not receive any future capital distribution amounts.

Is there a maximum number of funds that can be invested in?
No. There is no restriction on the number of funds that can be selected for investment. We publish guides for our unit linked funds and with-profits fund which provide information about the funds and their features.

Who manages the Unit-linked funds?
Unit-linked funds are managed by Aberdeen Asset Management.

 

This information is based on our understanding of current legislation and HM Revenue and Customs regulations, as at the date of production.