The Additional Funding Solution (AFS) has been developed for Defined Benefit pension schemes to address some of the key issues faced by them and is available through our well-established International Portfolio Bond.
AFS helps scheme Sponsors efficiently manage their pension obligations, as well as providing the scheme with protection against Sponsor insolvency. In addition, it helps to avoid issues around “trapped surplus” and provides additional investment freedoms by allowing contributions to be invested into a range of M&G Investment funds.
AFS provides a number of key benefits, such as:
- Security: protection against Sponsor insolvency
- Favourable accounting and tax treatment: the policy is treated as a plan asset for IAS19 accounting purposes
- Flexibility and investment freedoms: Sponsors/Trustees can choose which fund(s) their contributions are invested in from a select range of M&G Investments Funds
- Avoid “trapped surplus”: the scheme Sponsor avoids committing excess funds to the pension scheme
- Cost: we have developed an “off-the-shelf” solution to minimise overall costs for clients
To find out more about the structure of AFS, the benefits it can provide and its eligibility requirements please contact AFS@mandg.com.
As with all investment solutions, certain risks apply to the Additional Funding Solution including, but not limited to:
- The value of your investment can go down as well as up and you may not get back the amount you put in. If the total charges and costs are higher than any investment growth, your investment will fall in value
- Each of the investment choices available for the additional funding solution within the International Portfolio Bond, has its own specific risks that will affect the value of your bond. Some may also have features which mean there are restrictions on taking money out or moving money between investments