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Thread: PruFund Pension Cautious

  1. #1

    PruFund Pension Cautious

    I have had a meeting with an IFA regarding the possible transfer of my final salary pension. I am now awaiting a CETV from my former employer. They have told me that it will be "in the region of 320,000".
    The FA has said that IF the transfer were to take place and I was to ask them to manage it, their intention would be to put it into the PruFund Cautious Pension fund. From googling around I can see that that fund currently has an "Expected Growth Rate" of 5.5%.
    My question (borne out of great ignorance in this area) is; Am I correct in thinking that I would get 5.5% minus the FA management fee (0.5% I believe), or are there fees to be paid to Prudential as well?
    I understand about the effects of inflation and that the EGR changes of course, but as a starting point for trying to put figures into a spreadsheet can I assume that whilst the EGR stays at 5.5% my money will grow at 5% year on year?

  2. #2
    Thanks for taking the time to reply. I must admit I'm confused though. What calculation should I be using? Again, as I said, I understand that the % can vary, but IF it were to stay at 5.5% throughout a year, would there be any other deductions besides the FA's fee that I would have to factor in?

  3. #3
    its a niche fund aimed at extremely cautious investors. Typically not the sort of investor that pulls out of a defined benefit scheme.

  4. #4
    Personally, I would not project that fund on 5.5% p.a. basis. With interest rates expected to rise, that will hit the returns on the high fixed interest sector investments held within it (nearly 60% fixed interest sector). Long term maybe but short/medium term is likely to be lower (as much as ones crystal ball allows). The last 8 years have been good for it. Investments like this always do better when interest rates are falling and remain low. They suffer when interest rates rise.

    under project and get more is better than over project and get less.

  5. #5
    Returns are normally quoted net of charges"

    Cool. That's all I was after. LOL, but thanks for all that other stuff!

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