As part of our PruFund smoothing process, Prudential set Expected Growth Rates (EGR). These are the annualised rates your client’s investment would normally grow at. They are reviewed every three months, when they could rise or fall.
They are set quarterly by the Prudential Directors, with regard to the investment returns expected to be earned on the assets of the funds over the long-term (up to 15 years). They are published every quarter for each product. Your client’s investment will normally benefit from this growth rate on a daily basis, through an increase in the price of the units held (known as the unit price).
The daily price we produce for the series D and E funds is net of the Annual Management Charge (AMC).
The table below shows the current and historic EGR (gross of all product charges) and Unit Price Adjustments (UPA), correct as at 27 November 2023 (unless otherwise indicated).
Due to the strength of the With-Profits Fund, we’ve increased the unit price by 0.90% on 28 February 2023 for some of our customers invested in the PruFund funds. This unit price increase has no impact on the smoothing process. Customers invested in the International Portfolio Bond, Prudential International Investment Bond and International Prudence Bond will not share in the additional surplus. For further information please see www.pru.co.uk/aboutadditionalsurplus.
|Prudential Retirement Account - Series D||Expected Growth Rate (%)||Historic Expected Growth Rate||Historic Unit Price Adjustments|
|From||To||EGR (%)||Date||Type Of Adjustment||UPA (%)|
|PruFund Risk Managed 1 Pension Fund (RA)||6.50||25-05-2023||Present||6.50||25-08-2023||End||-2.36|
|PruFund Risk Managed 2 Pension Fund (RA)||6.90||25-05-2023||Present||6.90||25-08-2023||End||-2.72|
|PruFund Risk Managed 3 Pension Fund (RA)||7.40||25-05-2023||Present||7.40||25-08-2023||End||-2.96|
|PruFund Risk Managed 4 Pension Fund (RA)||7.70||25-05-2023||Present||7.70||25-08-2023||End||-3.32|
|PruFund Cautious Pension Fund (RA)||7.00||25-05-2023||Present||7.00||28-02-2023||End||+0.90*|
|PruFund Growth Pension Fund (RA)||7.70||25-05-2023||Present||7.70||25-08-2023||End||-2.80|
#This is a Unit Price Reset, to reset the Unit Price to the Unsmoothed Price.
*This is a special Unit Price Adjustment which allows for the additional surplus we’ve already shared. This has no impact on the smoothing process.
Past performance is not an indicator of future performance. Remember that the value of an investment can go down as well as up, your client may not get back what they paid in.
The Expected Growth Rates set at each quarter date may be higher, the same or lower than those applying at the start of the investment.
In addition, there may be times where the unit price may be adjusted which will impact any growth that clients may receive. The overall return achieved on any plan is affected by the amount of the investment, investment performance, the period over which the plan has been invested and the charges applicable to the plan.
We may decide to reset the smoothed price of a PruFund fund on a particular day, to protect our With-Profits Fund and therefore the interests of all our With-profits policyholders. This is not expected to happen often, and is only expected to be used in highly unusual circumstances.
If we decide to reset, the smoothed price of the affected fund would be adjusted to be the same value as the unsmoothed price on that working day. That adjusted smoothed price will then continue to grow in line with the Expected Growth Rate from the working day after this reset of the smoothed price. This is referred to as a Unit Price Reset in our literature.
There may be occasions where we have to suspend the smoothing process for one or more PruFund funds for a period of consecutive days, to protect our With-Profits Fund and therefore the interests of all our With-profits policyholders. This is not expected to happen often, and is only expected to be used in highly unusual circumstances. When this happens the smoothed price for the affected fund(s) is set to the unsmoothed price for each day until we reinstate the smoothing process.
You should refer to Key Features or Terms & Conditions of your client's plan for more information on how the Expected Growth Rates work.