Suspension of the Prudential Threadneedle Property Pension Fund

From 20 March 2020 we have suspended some transactions in the Prudential Threadneedle Property Pension Fund. This fund is linked to the Threadneedle UK Property Fund which was suspended on 18 March 2020 and our fund is suspending as a result.

What does this mean?

We cannot accept further investments into the affected fund, and you won’t be able to make some types of withdrawals from the fund.

What date was the fund suspended?

The Prudential Threadneedle Property Pension Fund was suspended from 20 March 2020 following the suspension of the underlying Threadneedle UK Property Fund.

Why have we made this decision?

The current economic circumstances brought about by COVID-19, means there has been uncertainty around valuations on property. As a result the fund manager has decided to suspend the underlying fund.

The Prudential pension fund directly affected by this suspension is:

Fund Name

Product

Prudential Threadneedle Property Pension Ser 3

Group Additional Voluntary Contributions Plan

Local Government AVC Scheme

Prudential Group Personal Pension Plan

Prudential Member Transfer Plan


How the suspension affects investors in the Prudential Threadneedle Property Pension Fund

Any existing investment in the Prudential pension fund will remain invested. We are currently allowing the following transactions:

  • Taking retirement benefits
  • Any claims on death or critical illness
  • Pension sharing on divorce.

These transactions are not allowed:

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

The unit prices for the Prudential fund are calculated using the prices of the underlying fund. This underlying fund is suspended but it remains invested and managed, and publishes a daily unit price. However, more recently, the independent valuers of the underlying fund have found it increasingly difficult to accurately value the properties held, which in turn affects that price.

The general lack of market activity means there are few similar properties with which to compare valuations. There are also issues with assessing how secure rental income from tenants may be, both now and in the future.

This means that if you move money out of the Prudential fund at this time, the unit price you receive may be more or less than the price we’d calculate in normal circumstances, when valuations are more certain. You need to be aware that your transaction will use the current price and that the amount of money you receive won’t be adjusted in any way at a later date.

How we’re communicating the suspension to existing investors

We’ll be writing to the trustees of schemes where this fund is available to provide them with information to help them explain to their members why we have taken this action and how this affects their investment with us. We’re aiming to do this as soon as possible.

In the meantime, we can be contacted on 0345 600 0343 for AVC products and 0345 300 2634 for MPP products.

Questions and Answers

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 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 the suspended funds. We will provide updates on this site.

You cannot switch or transfer out of the fund while the suspension is in place. You can still send us a completed form and we will keep the form, and contact you once the suspension is lifted to explain your options and to check whether you still want to proceed.

You cannot withdraw from the fund while the suspension is in place. You can still send us a completed form. We’ll keep that form and contact you once the suspension is lifted to explain your options and to check whether you still want to proceed. We can process withdrawals from any other fund holdings where transactions are not suspended, subject to individual policy rules.

Yes, we will honour and process all requests we received before 20 March 2020.

Yes, you can continue taking your retirement benefits. We will also continue to pay out on death claims. For further details please contact us.

We don’t yet know how long the funds will remain suspended for, but we’ll monitor the situation closely. We’ll publish more information on this page when we have it, or if the situation changes.

Yes, please call us on 0345 600 0343 for AVC products and 0345 300 2634 for MPP products.

Yes, the fund continues to be managed and priced. The unit price of the fund will continue to be published on our website.

The unit prices for the Prudential fund are calculated using the prices of the underlying fund. This underlying fund is suspended but it remains invested and managed, and publishes a daily unit price. However, more recently, the independent valuers of the underlying fund have found it increasingly difficult to accurately value the properties held, which in turn affects that price.

The general lack of market activity means there are few similar properties with which to compare valuations. There are also issues with assessing how secure rental income from tenants may be, both now and in the future.

This means that if you move money out of the Prudential fund at this time, the unit price you receive may be more or less than the price we’d calculate in normal circumstances, when valuations are more certain. You need to be aware that your transaction will use the current price and that the amount of money you receive won’t be adjusted in any way at a later date.

We will post any updates on this page.

We will redirect these contributions into the alternative fund selected by the scheme trustees until the Prudential Threadneedle Property Pension Fund is unsuspended, at which point we will look to backdate the contributions to the 18 March 2020 when the fund went into suspension.

You can choose to allocate these regular premiums to alternative funds if you wish. If you have chosen another fund in the meantime, you will not automatically be switched back into Prudential Threadneedle Property Pension Fund.

Due to the Property Fund suspension, we are unable to allocate any regular contributions to property during the suspension period and the Trustees have instructed us to redirect contributions into the Cash Fund.

The Cash Fund is viewed as less likely to fluctuate in value compared to other asset classes (company shares or bonds for example) and so less likely to negatively impact fund values whilst customers and their advisers think about any next steps. It is important to note that over the medium to long term the value of cash may be reduced by the impact of inflation.

You are free to choose an alternative fund into which future regular contributions are paid into.

No, there is no guarantee that the value of your investment in the Cash Fund will not fall. Prudential’s risk rating for the fund is ‘minimal risk’, however the value of the Cash Fund is subject to fluctuations which means the value of your investment can go down as well as up so you might get back less than you put in. Additionally, the charges Prudential makes for the administration of your pension may exceed the returns from the Cash Fund, especially when interest rates are low, and this will reduce the value of your investment in the Cash Fund. You can find more information about the fund from its fund factsheet. You are free to choose a different fund by sending in a fund reallocation request.

Any premiums paid after 20 March 2020 have been allocated to the Cash Fund.

Any premiums paid before 20 March 2020 have been allocated as normal to the property funds affected by this suspension whilst we communicate the suspension arrangements to scheme trustees and put in place the processes for redirecting regular premiums during the suspension period.

No – your investment will remain in the Prudential Threadneedle Property Fund. Investment switches out of the fund are currently not permitted.

No - If you would prefer to choose an alternative fund while the property fund is suspended, then you can. We do need you to send us a fund reallocation instruction to allow us to process this request.

Once the suspension is lifted, we will switch your resulting cash fund investment back into the Prudential Threadneedle Property Pension Fund (free of any switch charge).  If you have chosen another fund in the meantime, you will not automatically be switched to property.

If you choose a fund other than the Cash Fund for your contributions, you will not automatically be switched back and will remain in the fund you have chosen.