2017 was another successful year for our With-Profits Fund on the back of positive returns in many investment markets. As a result we're pleased to announce that the majority of our Income Choice Annuity customers will receive bonuses that deliver year-on-year increases in income after allowing for the Required Smoothed Return (RSR).
In 2018, we'll continue to manage the Fund in a prudent manner. We aim to secure the highest total return for the Fund over the long-term (after any tax and investment expenses) while maintaining an acceptable level of risk and protecting our planholders. We'll also continue to smooth some of the extreme highs and lows of short-term investment performance.
We aim to ensure those with an annuity get their fair share of the With-Profits Fund's investment returns via the announced Smoothed Return. In addition to the investment returns on the Fund, the Smoothed Returns we announce depend on several factors including:
The announced Smoothed Return can be changed and isn't guaranteed until it's due to be paid on your next Plan anniversary. It could even be negative, for example, if stock markets perform badly. The effect of the Smoothed Return we announce on your income is included in your yearly statement. This leaflet explains the 2018 Smoothed Return Announcement for the Income Choice Annuity.
See the bonus declaration for the With-Profits fund.
On the Bonus Declaration literature page, you will find literature and sales aids that you can use to discuss bonus declaration with your clients.
| Effective date | 1st anniversary | 2nd anniversary | 3rd anniversary | 4th anniversary | 5th anniversary | 6th anniversary | 7th anniversary | 8th anniversary | 9th anniversary | 10th Anniversary |
|---|---|---|---|---|---|---|---|---|---|---|
| 09/03/09 to 05/04/09 |
7.1% | 8.5% | 9.0% | 7.0% | 6.0% | 8.0% | 8.5% | 5.0% | 10.0% | 12.0% |
| 06/04/09 to 05/04/10 |
7.1% | 7.1% | 6.5% | 5.0% | 7.5% | 8.5% | 5.0% | 9.0% | 11.0% | n/a |
| 06/04/10 to 05/04/11 |
6.5% | 4.5% | 4.5% | 6.5% | 7.0% | 4.0% | 8.0% | 11.0% | n/a | n/a |
| 06/04/11 to 05/04/12 |
6.0% | 4.5% | 6.5% | 7.0% | 4.0% | 8.0% | 11.0% | n/a | n/a | n/a |
| 06/04/12 to 05/04/13 |
6.0% | 6.5% | 6.5% | 3.5% | 8.0% | 11.0% | n/a | n/a | n/a | n/a |
| 06/04/13 to 05/04/14 |
6.0% | 6.0% | 3.0% | 8.0% | 11.0% | n/a | n/a | n/a | n/a | n/a |
| 06/04/14 to 05/04/15 |
5.0% | 2.5% | 7.0% | 9.5% | n/a | n/a | n/a | n/a | n/a | n/a |
| 06/04/15 to 05/04/16 |
5.0% | 6.0% | 8.0% | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
| 06/04/16 to 05/04/17 |
6.0% | 8.0% | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
| 06/04/17 to 05/04/18 |
6.0%* | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
*This applies to customers originating from our Flexible Lifetime Annuity (FLA) only.
Source: Prudential
Past performance is not a reliable indicator of future performance. Changes in the income payable from an Income Choice Annuity will depend on the relationship between the Smoothed Return announced and the Required Smoothed Return needed to maintain the customer's chosen income. The income from an Income Choice Annuity can fall as well as rise at each plan anniversary. The Smoothed Return can be changed and it is not guaranteed until it becomes payable at the next plan anniversary.