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Standard can’t justify third value

I am curious as to how Standard Life can justify the introduction of a third value of their pension policies which have funds in the with-profits fund.

We are all used to MVRs, leading to a reduction in a transfer requested prior to the normal retirement age. Most providers accept that if a client stays with the plan until the originally stated retirement date, then an MVR should not apply. Standard Life is now using a fund value, a transfer value and a retirement value, all of which can be very different. The retirement value is the sum that can be used for annuity purchase or if the client agrees to go into full drawdown.

The transfer value is paid if the client and their advisers decide to move the funds to another plan, without taking full immediate benefits, even if this is after the NRD of the original plan. Phased retirement is also deemed not to be retirement and therefore the transfer value is given.

This seems to be completely immoral. If a fund is worth 100,000 at the NRD of the policy, if the client wants to buy an annuity even with another provider, how can they justify claiming that the fund is only worth 90,000 if the client wants to stagger their retirement or to use the funds in a Sipp for alternative investments?

It seems to be a shameless attempt to shore up the leakage of funds from the fund following the client’s receipt of demutulisation shares. Does TCF not apply to Standard Life?

Mike Caffyn


The Retirement Planning Partnership,

Romsey, Hampshire


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