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PruFund Protected Funds - update on guarantee charges and introduction of new guarantee terms from 26 May 2017

Guarantee Charges

At Prudential we regularly monitor the cost of guarantees and review pricing on a quarterly basis, to ensure that our charges reflect the market cost of providing guarantees and are offered at a reasonable price to your clients.

We have recently reviewed the pricing for our PruFund guarantees, and we are pleased to announce that the guarantee charges on our current terms remain unchanged this quarter.

New guarantee terms

It is important to us to be able to offer choice to your clients who want the additional security that a guarantee can offer, so that they are able to choose guarantee options that most meet their needs.

With this in mind we have extended the guaranteed terms and introduced a new 11-15 year terms for Prudential Investment Plan (PIP), Prudential International Investment Bond (PIIB) and Retirement Account. The new terms will become available from 26 May 2017.

Please note that illustrations for these terms cannot be produced until this date.

The table below summarises the updated range of terms and the charges for the guarantees currently available, and those available from 26 May 2017.

PIP, PIIB, Retirement Account

Term

PruFund Protected Cautious

PruFund Protected Growth 

 

Current

New

Current

New

10

1.00

1.00

1.50

1.50

11

0.90

1.40

12

0.80

1.30

13

0.70

1.15

14

0.60

1.00

15

0.50

0.90

Flexible Retirement Plan, Trustee Investment Plan

Term

PruFund Protected Cautious

PruFund Protected Growth 

 

Current

New

Current

New

10

1.00

1.00

1.50

1.50

International Prudence Bond

Term

PruFund Protected Cautious

PruFund Protected Growth 

 

Current

New

Current

New

10

Suspended

Suspended

Suspended

Suspended

'Current' reflects the position for new business up to 26 May 2017, and 'New' reflects the pricing that will be live for new business from 26 May 2017.

There is no change for customers who already have a guarantee.

No changes to terms on Flexible Retirement Plan (FRP) and Trustee Investment Plan (TIP)

FRP and TIP will still have access to the 10 year guarantee on the PruFund Cautious and PruFund Growth Funds.

Individual pension customers wishing to purchase a capital guarantee under the new terms will have the option via Retirement Account.

The transitional arrangements for PIP, PIIB and Retirement Account

  • Illustrations for the new 11-15 year guarantee terms will be available from 26 May 2017.
  • If an illustration has been produced on a 10 year guarantee term or no guarantee, and a client wants an illustration on one of the new 11-15 guarantee terms, this will not be available until 26 May 2017.
  • Any new business for the new 11-15 guarantee terms cannot be submitted until on or after 26 May 2017.
  • For cases already submitted but not yet completed, and where a client wants to change/add one of the new 11-15 year guarantee terms, the existing application can still be used subject to the following:
    • For PIP or PIIB, we will require an email or written confirmation from the customer to amend or add the guarantee.
    • For Retirement Account, we can accept an email from the adviser confirming this information, however should the adviser require a quote reflecting this change, it will be their responsibility to produce this online for their file. This is only possible where we have yet to place the trade in to the fund. If the trade has already been instructed then the application will need to be cancelled and resubmitted by the adviser.
    • For the above scenarios the case will be managed through Eplus, so please ensure you escalate these where appropriate.

For Retirement Account only:

For existing plans with a guarantee where a client wants to change to one of the new 11-15 guarantee terms, the existing rules for changing a guarantee will still apply. These rules are stated in the PruFund Booklet RACB257702: "The capital guarantee can be reduced or removed if your needs were to change. If the guarantee is removed, the capital is no longer guaranteed. You can also add further capital guarantees in the future, subject to availability and not having cancelled or partially reduced a capital guarantee in the past 12 months."

For more information please speak to your Account Manager.

For UK Adviser Use Only - Not Approved For Use With Clients