Q&A – Suspension of insured Life & Pension Property funds

We have announced a suspension on transactions on a number of insured property funds that we offer. These funds are linked to the M&G Property Portfolio Fund which was suspended on 19^th October 2023.

Our linked Life and Pension funds are suspended from 11am on 20^th October 2023.

Property funds have been less popular with investors over the last few years. Investors have sold their holdings, and the Funds are smaller. M&G Investments believes that withdrawals from the funds are likely to continue, and there is a risk this may accelerate in the future. As the funds reduce in size, it becomes necessary for the fund manager to sell some of the fund’s larger properties and buy smaller ones. Doing this will incur high transaction costs which will negatively impact the performance of the funds.

M&G Investments believes that the funds will continue to reduce in size, and after considering a number of options, they've decided that it's in the best interests of investors to close the funds as soon as practicable to allow for an orderly disposal of the funds’ assets and return the proceeds to investors.

The following OEIC funds on Retirement Account are also impacted:

Currently we do not believe this issue will impact any of our other funds.

Their existing investment in the Prudential M&G Property Portfolio life and pensions funds will remain invested.

The following transactions are allowed:

• Taking retirement benefits
• Any claims on death or critical illness
• Pension sharing on divorce
• New Business cancellations within the regulatory cooling-off period

Not allowed:

• Further investments into the fund
• Withdrawals out
• Any switches in or out of Property
• Life surrenders
• External transfers 
• Increases to adviser charges taken from Property funds.

We do have some multi-asset funds which invest in a wide range of assets, with property being just one of those invested in. These are not suspended even where that Property exposure is obtained through the M&G Property Portfolio Fund, but we will continue to monitor the situation.

At this time we cannot accept any new investments into any suspended funds. We will provide updates on this site.

At this time we cannot accept any switches into property. 

They cannot switch or transfer out of the fund.

They cannot withdraw from the fund. We can process withdrawals from any other fund holdings where transactions are not suspended, subject to individual policy rules.

For unvested money (in the savings account), partial transfers are permitted. If the money is vested, a partial drawdown transfer is not permitted.

Yes, taking your retirement benefits and maturities will continue to be paid. We will also continue to pay out on death claims. For further details please contact us.

Previously arranged regular withdrawals and income payments will continue to be paid.

The funds will remain suspended indefinitely.

Yes, please call your usual contact for valuations.

The unit price of the fund will continue to be published on our website.

We will post any updates on PruAdviser and write to affected clients and their advisers.

Yes. However, we have a high number of policyholders invested in Property funds across a variety of life, and pension products and it will take some time to work through this and ensure that we communicate clearly with our customers in sufficient detail. We’ll aim to communicate as soon as possible.

Copies of letters being sent to clients:

• https://www.mandg.com/dam/pru/shared/documents/en/10/client-mailing-letter.pdf
• https://www.mandg.com/dam/pru/shared/documents/en/11/genl100663103.pdf
• https://www.mandg.com/dam/pru/shared/documents/en/11/genl100662903.pdf
• https://www.mandg.com/dam/pru/shared/documents/en/11/genl100663102.pdf

No, the letter is for information purposes only. We will write to them again when we have any further details on the future of the funds. In the meantime you can check PruAdviser for more information.

We cannot invest regular premiums into property funds while the suspension is in place. Instead, to allow continuity of investment, any regular premiums that would have been invested in the property fund will now be invested into the relevant cash fund for your clients’ product during the suspension period.

Due to the Property fund suspension, we are unable to allocate any regular premiums to Property during the suspension period. The Cash fund is being used at it is the most suitable alternative and is defined as the default fund to be used under a fund suspension scenario. Your client is free to choose to allocate these regular premiums to alternative funds if they so wish.

Any premiums paid before 20^th October 2023 have been allocated as normal to the Property fund whilst we communicated the suspension arrangements to customers and put in place the processes for redirecting regular premiums during the suspension period.

No – this will be free of charge.

No – the reallocation of premiums is to protect future premiums. Investment switches out of the property fund are currently not permitted.

No - If they would prefer to choose an alternative fund while the property fund is suspended, then they can. We do need them to send us a fund reallocation instruction to allow us to process this request. Or you may want to provide advice before taking any action.