- Investments
- Smoothed Return Pension Fund
- Smoothed return pension fund FAQs
Smoothed Return Pension Fund FAQs
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When a client invests into the Standard Life Smoothed Return Pension Fund their money is initially placed into the Standard Life Smoothed Return Feeder Pension Fund. The investment amount will stay within the Feeder Fund for 10 working days before being automatically switched into the main fund, which happens 2 days later.
This is a step that enables the fund manager to provide the smoothing mechanism for the Fund. The progress of a client's investment can be tracked using the transaction history page once an instruction has been submitted.
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The investment return in the feeder fund is always equal to the Estimate Growth Rate (EGR), minus fund charges.
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Please search for the Standard Life Smoothed Return Pension Fund.
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No, the Standard Life Smoothed Return Pension Fund (and the Standard Life Smoothed Return Feeder Pension Fund) is not available within a Capped Drawdown Account.
However, it is available within a Flexi Access Drawdown Account.
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The EGR is the annual percentage rate used, together with the fund charges, to calculate the increase to the unit prices at the end of each working day. Standard Life calculate the EGR based on long-term market growth expectations of the underlying assets.
The EGR is reviewed on a quarterly basis. Historic and current rates are available on request.
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Yes, a transfer into a Fidelity Pension Savings Account and a transfer to an immediate Fidelity Flexi Access Drawdown is available.
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No, this is not possible because the Standard Life Smoothed Return Pension Fund is not available on any other platform.
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No, a client is not able to sell from the entry fund apart from in the following circumstances: cancellation rights exercised, transfers out, death of the client, deal corrections or serious ill-health benefits.
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Yes, you can generate an illustration for an investment into the Standard Life Smoothed Return Pension Fund. You can also produce an illustration for existing holdings, including top ups into the fund.
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The following client-facing documents are available for the Standard Life Smoothed Return Pension Fund:
- Illustration
- Beginners guide to smoothing
- Customer guide
- Technical Guide - What you need to know
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There is no formal minimum investment.
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The Fund can be held within a Fidelity Pension Savings Account, a Fidelity Pension Drawdown Account and a Fidelity Junior Pension Savings Account.
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This is a step that enables the fund manager to provide the smoothing mechanism for the Fund.
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Buys as part of a lump sum, regular Savings Plan, cash transfer or switch in.
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The following materials are available to advisers:
ADVISER FACING
- Adviser guide
- Target Market and Product Governance document
- Risk rating guide
- Approach to fund governance
- Investment commentary
- Fund factsheet
CLIENT FACING
- Customer guide
- Technical Guide - What you need to know
- Beginners guide to smoothing
- Illustration
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The Smoothed Return Pension Fund invests in a range of funds managed by Fidelity. The asset class breakdown is shown in the Fund Factsheet.
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Investment performance figures are shown on the client's account and historic EGRs are available here.
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The illustration produced by Fidelity has set growth rates for money market instruments (including cash), bond and equity funds which are recalculated at the start of each tax year. Each investment on the platform is aligned to one of these growth rates.
The Standard Life Smoothed Return Pension Fund is a multi-asset fund, which is aligned to bond growth rates within Fidelity’s illustrations. The assumed growth rate is a weighted rate and is indicative only and is not linked to the EGR. The purpose of the illustration is to show the likely effect of cost and charges on the client's investment for year 1.
The figures take account of inflation at an assumed rate of 2.00%, which has the effect of reducing the investment return. Inflation could be lower or higher than this.
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They will receive the same documentation they receive when investing in any other fund. Please note, Confirmation Of Transactions are being produced for the Standard Life Smoothed Return Pension Fund.
Entry into the Fund
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A holding will be shown to two decimal places.
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Whilst you cannot use the Standard Life Smoothed Return Pension Fund directly within a model portfolio, you can hold the fund alongside. For example, for a client with £100,000 available to invest, you could place £80,000 within a model portfolio and £20,000 in the Smoothed Return Pension Fund.
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The client will be able to retain the holding and sell down the smoothed fund but will not be able to purchase more units. However if the client has a regular savings plan, this can continue at the current rate but cannot be amended.
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It will be shown as the Standard Life Smoothed Return Pension Fund and will be visible in the holding section along with any other investments the client holds.
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The Fund will be visible in B2B reports, Illustrations, Client Reports and Oneview Statement & Valuations. It will also be visible within the Portfolio X-Ray tool, although the underlying funds will not be shown.
As the Fund is an accumulation fund, it will not be visible in the Income Report.
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Yes, the Fund will be shown within back-office reports.
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The value of the Fund is smoothed and aims to increase at an Estimated Growth Rate (EGR), less the fund charge. This reflects the longer-term growth expectations Standard Life has for the fund.
If the unit price of the underlying fund drifts away from the smoothed fund unit price by more than a set amount, then the unit price of the smoothed fund will be adjusted to bring it closer to the underlying fund value.
It is not an NAV fund.
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You can access the changes here.
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Unlike traditional investments, the Fund undergoes a ‘smoothing’ process which aims to shelter it from some of the short-term ups and downs often seen in the stock market.
It’s important to understand that the Fund carries no guarantees and an investor may get back less than was paid in.
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The underlying NAV of the Fund is not disclosed. This is because of how this type of fund works. The unit price of the smoothed fund is based on the Estimated Growth Rate (EGR), less the fund charge, rather than the NAV of the underlying assets supporting it. This approach differs from a traditional fund where unit prices are directly linked to the NAV of the assets of the fund which is due to the unique smoothing investment experience.
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The Fund has an Estimated Growth Rate (EGR) and it is anticipated that the Fund will grow by this rate. The growth rate will be monitored regularly with adjustments made when needed.
This rate is subject to regular and ad hoc adjustments.
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Unlike traditional investments, the Fund undergoes a ‘smoothing’ process which aims to shelter it from some of the short term ups and downs often seen in the stock market.
It’s important to understand that the Fund carries no guarantees and an investor may get back less than was paid in.
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Standard Life calculate the EGR based on long-term growth expectations of the underlying fund. A review of the EGR is carried out quarterly, but may undergo an additional ad-hoc review if required.
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If the underlying fund unit price rises to be above 110% of the unit price of the smoothed fund then we will make an adjustment. This adjustment increases the unit price of the smoothed fund to be 2.5% lower than the underlying fund’s unit price.
If the underlying fund unit price falls to be below 90% of the unit price of the smoothed fund then we will make an adjustment. This adjustment would decrease the unit price of the smoothed fund to be 2.5% higher than the underlying fund’s unit price.
We also carry out twice monthly monitoring of the unit prices of the smoothed fund and the underlying fund, which can also result in changes to the unit price of the smoothed fund. These twice monthly reviews take place on the 5th and 20th of the month. If the review date is due to take place on a non-business day such as a bank holiday, we move the review to the next working day. This review is carried out after the daily monitoring review has taken place.
For the twice monthly monitoring, if the underlying unit price rises to be above 105% of the unit price of the smoothed fund then an adjustment will be made. This adjustment would increase the unit price of the smoothed fund by halving the difference between the two unit prices.
For the twice monthly monitoring, if the underlying unit price falls to be below 95% of the unit price of the smoothed fund then an adjustment will be made. This adjustment would decrease the unit price of the smoothed fund by halving the difference between the two unit prices.
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The smoothing mechanism is the differentiating factor and this is reflected in the costs.
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Yes, all fees can be facilitated from the Standard Life Smoothed Return Pension Fund (but not from the feeder fund).
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Yes, this is possible. Please check the Fidelity website to understand what the minimum monthly investment will be.
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Yes, the switch process will be the same as for any other investment. The only difference is the money from the switch will go into the feeder fund before being moved into the Standard Life Smoothed Return Pension Fund 12 days later.
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A switch out of the Standard Life Smoothed Return Pension Fund directly into 'Exchange-Traded' Investments is not possible. Money from the Standard Life Smoothed Return Pension Fund needs to be switched to Fidelity Pension Cash first and once this transaction has settled the client will then be able to buy Exchange Traded Investments.
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The deal cut off time is 10.00am.
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Current and historic EGRs and UPAs will be published here.
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The hierarchy for disinvestment when crystallising is as follows: Cash first, then mutual funds, then brokerage assets and finally the Standard Life Smoothed Return Pension Fund.
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Standard Life may suspend the smoothing process in the following circumstances:
- A change in law or regulation, or government directive that prevented us from providing smoothing
- Any circumstances outside of our reasonable control, as described in the Technical Guide
- An infrastructure failure preventing us from providing smoothing
- If the Standard Life Smoothed Return Pension Fund is closed
In such an instance, the unit price would be reset to be the same as the unit price for the underlying fund. The price would then move in line with the underlying fund unit price for as long as the smoothing suspension remains in effect.
Where we have made the decision to suspend smoothing, we will review the decision on an ongoing basis. Once we are able to do so, we will reinstate the smoothing process as soon as it is reasonably practicable to do so.
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Yes. A message will be shown on the current and historic EGRs and UPAs web page.
Ongoing management
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When switching out of or selling from the Standard Life Smoothed Return Pension Fund, there will be a delay of up to 10-working days between the instruction and the actual transaction.
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Only one sell or switch instruction for the Standard Life Smoothed Return Pension Fund is allowed in any 90-calendar day period. If an instruction to sell or switch from an account has been placed in the past 90-calendar days, a further instruction cannot be placed until 90-calendar days have passed since the submission of the initial instruction.
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Sell instructions for the Standard Life Smoothed Return Pension Fund are converted into percentage of units before the instruction is placed and are subject to changes in value over time.
Please note, when submitting an instruction to sell from the Standard Life Smoothed Return Pension Fund, the actual instruction will be delayed for 10-working days. The actual sum received by your client may therefore differ from the instruction amount placed.
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When switching out of or selling from the Standard Life Smoothed Return Pension Fund, there will be a delay of 10 working days between the instruction and the actual transaction. Once the sell instruction has taken place, it will then take three working days (T+3) for the monies to reach the client's bank account.
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No, the 10-working day delay does not apply to regular income payments.
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No, the Standard Life Smoothed Return Pension Fund is not available for re-registration out as it is not available on any other platform. The Fund will be sold and transferred as cash.
Any request to transfer an investment in the Standard Life Smoothed Return Pension Fund from Fidelity to another provider is subject to a 10-working day delay.
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Yes, the proceeds will then move to cash and then can be transferred out from Fidelity to another provider. Any request to transfer an investment in the Standard Life Smoothed Return Pension Fund from Fidelity to another provider is subject to a 10-working day delay.
If your client holds other assets, Fidelity will sell those assets as soon as they receive the transfer request. However, they won’t send the payment to the other provider until the proceeds from the Standard Life Smoothed Return Pension Fund are also available.
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The fund manager requires this feature to be in place in order to be able to provide the smoothing mechanism for the Standard Life Smoothed Return Pension Fund.
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Switches, sell to cash, ad-hoc taxable income, UFPLS and transfers out.
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There are a number of transactions which ignore the rules relating to the imposition of a 10 working day delay. These are:
- Regular income payments (i.e. where automated income transactions are set up and processed by the platform)
- Pension Commencement Lump Sums
- Lump sum death benefits
- Serious ill-health benefits
- Small pension pot payments (up to £10,000)
- Deduction of fund charges
- Facilitation of adviser charges
- Customers exercising their right to cancel their Fidelity pension contract
- Plus customers subject to a Pension Sharing Order
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The fund manager requires this feature to be in place in order to be able to provide the smoothing mechanism for the Smoothed Return Pension Fund.
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There will be no delay where a Pension Commencement Lump Sum is taken.
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There is no delay for regular taxable income. However, there will be a delay for ad-hoc taxable income.
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Yes, although delayed transactions won't show until the transaction has been processed (dealt into the main fund).
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This is in order to prevent other sells or switches from being delayed.
Withdrawals from the Fund
Money invested is at risk. Tax may change in the future.
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