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How Whitechurch securities constructs the pension tables

When we set out to analyse personal pension providers and their funds, we majored on the factors on which we would place the greatest emphasis when choosing companies that we would be happy to put forward to our own clients. Clearly, there are other ways of analysing things and different criteria would probably produce different results but we feel we have come up with a useful system.

The Whitechurch basic score takes into account charges, (including policy fees, initial charges and internal AMCs), financial strength of the company, quality of service to IFAs and range of funds available. If we cannot obtain all the information we require, a company is excluded from our rankings.

We then analyse the actual returns achieved, with particular attention being given to more recent time periods. We consider the balanced managed funds for unit-linked,as this gives a good indication of strength in stock selection and asset allocation. We take the last five discrete years, double-weighting being given to the last year. The previous year is 1.75 weighted, three years ago is weighted 1.5 times, four years 1.25 times, down to a single weighting for five years ago. Going back much further is not so relevant with unit-linked funds as managers could have moved on or investment style might have changed significantly. The performance monitoring accounts for 50 per cent of total possible score.

Once we have established this, further marks are added for more subjective matters such as the profile of the company in the marketplace and a general sleep at night factor. These marks appear under the Whitechurch SAN (sleep at night) column. We would stress that these particular marks can only influence the result by roughly 10 per cent.

Premier pension providers (unit-linked)

To appear on this list, a company has to average in excess of the top 5 per cent of scores across the range of products considered. In addition, we feel they also have to offer clients a with-profits fund, to provide greater flexibility and have a stakeholder benchmark contract. Here are our premier pension providers for unit-linked contracts:

Norwich Union

Clerical Medical

Standard Life

Scottish Widows

Premier pension providers (with-profits)

For with-profits, we start from the same point in terms of financial strength, service, etc as detailed above. We then double-weight the scores for solvency cover.

The investment returns we consider are over five, 10 and 15 years. As before, we give greater importance to more recent periods and double-weight five years, with a sliding scale to a single weighting over 15 years.

Not only does the company have to fall within the top 10 per cent of scores but it must also have solvency cover in excess of the median for the sector surveyed, and have a stakeholder benchmark contract.


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