Phoenix Share Discussion Threads

[hyden] 12/11/2017 17:31

PHNX no longer manage the funds Fenners, they sold the asset management business, Ignis Asset Management, a while ago so they need not worry about the loss of annual management fees. This aside, I would suggest the market focus is very much on the release of capital so this is potentially good news if a lot of policyholders go for it. :-)

And yes, you are right that some of these policies will offer guaranteed annuity rates in high single digits (or even low double digits) and thus are very valuable in current times. In my opinion policyholders are mad to sacrifice these benefits but the prospect of cash now is often very persuasive for some.

[fenners66] 11/11/2017 21:39

Thanks Hyden.
If these funds carry guaranteed returns which were written into the contracts in the 1980's I have read they could promise mid teens annuities ( if this is the same we are talking about).

If they bought these funds with associated provisions set aside to cover these returns and then end up not making the payouts then I can well believe that would release some capital.

You can imagine a defined contribution fund so you know the transfer value - but with a guaranteed annuity rate at the end - if you offload the fund without the guarantee - in return for the policy holder cashing in years early then there will be a tidy reserve released.

The downside is presumably reduced funds under management and reduced annual management fees.

[hyden] 11/11/2017 01:00

Edit: On second thoughts, by policyholders giving up entitlement to guaranteed returns, it will allow PHNX to release capital* from the life funds (otherwise required for regulatory purposes such as Solvency II, etc.) which benefits shareholders because it means more money is available for acquisitions and / or dividends. :-)

* This isn't necessarily free money by the way, it simply means that money will be released from the life funds earlier than would otherwise likely be the case.

[hyden] 11/11/2017 00:54

MVR stands for Market Value Adjustment, basically a penalty which applies to with-profits funds* on early encashment. PHNX are offering to waive this penalty which is potentially attractive to certain policyholders who would like to take advantage of the fairly recent change in the law regarding pensions (pensions freedoms).

The NPL fund is simply the name of a with-profits fund* managed by Phoenix. I would suggest (but do not know for certain) that NP stands for National Provident and the 'L' stands for Life or Limited, simply one of the many companies owned by PHNX

* A with-profits policy is basically a policy which comes with certain guarantees at specific points in time, typically retirement (in the case of pensions) or maturity (in the case of investment-based life policies such as endowments or whole of life policies). These types of policy were heavily marketed by insurers in the 80's and 90's but fell out of favour in the 00's following the bursting of the .Com bubble and the Equitable Life debacle. The guarantees proved very expensive following the market falls and indeed ultimately brought Equitable Life to its knees.

You might ask why would PHNX want to waive the penalty, what's in it for them? Well, if PHNX were to offer this facility to all policyholders then I would have said that With-Profits fund in run-off are expensive to manage as the costs are largely fixed and will not diminish as the book runs down. This is very unattractive to PHNX, given its stated ambition is to acquire and manage funds in run-off. It needs to do this efficiently in order to turn a profit.

However, because PHNX are only offering this facility to older policyholders then my rationale falls flat on its face so, instead, I suggest that this course of action is possibly influenced by the regulator's review of unfair / onerous terms on life polices and PHNX might be taking pro-active action ahead of regulatory censure.

[fenners66] 10/11/2017 22:49

"Phoenix Life is mailing all customers in the pilot, outlining in plain English"

Pity they cannot write the article in plain English

What is MVR ?
What is NPL fund?

[lauders] 10/11/2017 11:12

When Phoenix customers first took out their pension, it was common to stop work and retire at age 60 or 65. However, the introduction of pensions freedoms have provided customers with more options from age 55.

The customers in this pilot currently have an MVR levied on their policy which means if they withdraw funds before their selected retirement date (typically age 60 or 65), the value of their fund will be reduced to reflect the actual value of the units they have invested.

This pilot scheme is being offered to 1,000 customers in the Phoenix NPL fund, and gives customers a choice – to remain with the with-profits fund and continue to benefit from the guaranteed annual returns or switch the money to a unit linked fund MVR-free which offers greater flexibility should they wish to access funds before their selected retirement date.

More choice for some customers.

[arf dysg] 19/10/2017 09:37

But there's no F in HMRC...

"Oh, I WISH there were no effing HMRC"


The F stands for "bless them".

A rugby club now, does that mean they like to throw their weight around?

[jonwig] 18/10/2017 18:21

Arf - me too, still. HMRC a rugby club?

[arf dysg] 18/10/2017 16:16

Skinny, now I can see the carton. Aha! I get it now, oh yes.

Shouldn't it be spelled "HMFRC" ?

[my retirement fund] 17/10/2017 15:41

I cancelled my subscription a few years ago. No intention to ever subscribe again. Presently living of student loans. Expect to take my tax free pension in a few years at 55 below the repayment limit. If they come up with some way of unsubscribing me then I'll simply drink myself to death.

[arf dysg] 17/10/2017 09:22

Skinny, I don't get it.

[sogoesit] 13/10/2017 16:27

Lol!
Good weekend all!

[stonesfan] 13/10/2017 16:25

Nice one Skinny

[sogoesit] 13/10/2017 16:18

True, on a point of law, Lord Gnome, what happens on decease... does everything go into an Estate managed by the executor?
I guess then, in time, the Executor resolves any issues including, hopefully, whether or not one is actually dead?
HMRC, of course, have claims on the Estate too.

Or can someone be "bureaucratically dead" (while still alive) and the will/estate process not be triggered (with no death certificate)?

[lord gnome] 13/10/2017 16:11

It's no good getting a letter from your pension company that says you're dead - they will stop paying your pension. ;-(

[sogoesit] 13/10/2017 15:22

Yes, oops I edited a part saying "the only letter saying I'm dead I would want to receive would be from HMRC"!
(Apologies, I should stop editing from my phone)

[solarno lopez] 13/10/2017 15:20

whilst still drawing your pension and spending it !

[sogoesit] 13/10/2017 15:16

If you get a letter saying you're dead from an insurance company wouldn't that involve a payout to you?
Wouldn't that be good news ;-)?

[speedsgh] 12/10/2017 08:30

Untimely communications! Seems like office admin needs tightening up at Phoenix :o)

Abergele pensioner gets letter from insurance company telling him he's dead! -

Second pensioner reports receiving insurance letter on her 'death' -

SunLife Limited and AXA Wealth Limited are both part of the Phoenix Group.

[jonwig] 10/10/2017 09:41

OK, thanks - I've never used them.

[woodhawk] 10/10/2017 09:28

No, they have regular share dealing accounts too - I have a regular sharedealing account plus ISA and SIPP share accounts with them. I usually find them very good - the only slight drawback being that they're not too swift in paying dividends(though I usually find it is within, say, 3 days of the actual payment date).

[jonwig] 10/10/2017 09:07

Woodhawk - isn't IG Index for spreadbetting and CFDs? If CFDs is how you hold the stock, getting the dividend won't be a straightforward process for them I'd have thought. Or have you had prompt payment in the past?

[woodhawk] 10/10/2017 08:53

Well, well, IG Index finally deigned to pay my PHNX dividends 8 days late.