But the funds offered by RLI are nothing like the old EL WP funds. ValueShare is simply a discretionary "profit share" bonus. Comparing RLI to EL is apples and oranges in my opinion.
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- Thread starter Poseidon
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With profits funds also delivered a discretionary profit share from mutual companies.
If
When you know that you are maturing the plans (moving from pre-retirement products to a post-retirement product) you could get a price from more than one provider. Once you have all the informatio you can make an informed decision.
The comparison with Equitable is misleading. They were a direct to consumer company (so brokers dodged that bullet
) and their real issue was guaranteed annuity rates, if I remember correctly. There's no promise/guarantee with the RL products. I think actuaries finally learned their lesson. There are still a lot of customers of Standard Life & Aviva who are restricted in the transferability of their unitised with-profit funds, and forced high allocations to non- equity assest, because those products had/have guaranteed growth rates of 4% on them. Market Value Adjustments still apply 20 years later.
When you know that you are maturing the plans (moving from pre-retirement products to a post-retirement product) you could get a price from more than one provider. Once you have all the informatio you can make an informed decision.
The comparison with Equitable is misleading. They were a direct to consumer company (so brokers dodged that bullet
) and their real issue was guaranteed annuity rates, if I remember correctly. There's no promise/guarantee with the RL products. I think actuaries finally learned their lesson. There are still a lot of customers of Standard Life & Aviva who are restricted in the transferability of their unitised with-profit funds, and forced high allocations to non- equity assest, because those products had/have guaranteed growth rates of 4% on them. Market Value Adjustments still apply 20 years later.
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Yes, but EL's WP funds are not comparable to the managed and passive funds offered by RLI. The EL WP investment approach was instrumental in their demise. The bonus is simply a tangential matter in the greater scheme of things.
LDFerguson
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While there are some similarities, Royal London's Value Share bonus is a long way off the With-Profit funds or products of old.
- With-Profit contracts offered some level of guaranteed minimum growth and some offered guaranteed annuity rates in advance. Such guarantees proved to be hugely costly for the companies when asset values and open-market annuity rates fell and as has been said, contributed to the fall of Equitable Life. Value Share offers no such guarantees and indeed might not be paid in the future.
- With a With-Profit fund, the policyholder didn't choose their own asset allocations. They chose the With-Profit fund and the fund manager decided what the fund invested in. Royal London offer a range of funds that people can choose from and mix between if they want. Maybe they'll pay a Value Share bonus each year; maybe they won't. It's not central to the investment decision and should be viewed as a nice bonus if it arrives.
Thank you again everyone for your thoughts. I shall consider all options and as suggested and get quotes when maturing from both and more too. It may be a year or two before that happens so whether or not it would be significantly better to change to RL from Zurich with existing policies now, is hard to know. It would have better charges certainly, but over such a short timespan it might not be overly beneficial.
It may not be significantly advantageous to switch now but it will definitely be advantageous to be subject to lower charges and potentially benefiting from the ValueShare bonus - all things being equal (e.g. investing in the same sort of asset mix with RLI as with Zurich).
It's a very fair point. I'll call and see what they say, it makes sense and maybe where I would be going anyway post drawdown. I know it's probably stupid but I'd worry the current losses on my fund might crystallise to an extent as the funds are similar but not the same. A lot to think about.
You wouldn't be crystallising any losses by transferring from one pension provider to another.
0.6% here before any discretionary ValueShare bonus:
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