December 2021 update

Prudential M&G Property Portfolio Life and Pensions funds

This page was last updated on 8 December 2021. Please see the ‘Latest update’ section below.

The suspension on transactions that took effect from 5 December 2019 for the Prudential M&G Property Portfolio Life and Pensions funds (the linked “property fund(s)”) was lifted with effect from 10 May 2021.

In May we wrote to all customers who were invested in the M&G Property Portfolio (the “underlying fund”) or the property funds to make them aware of this. At the time we also informed customers that any regular contributions that were temporarily redirected to the Prudential Cash fund (the “cash fund”) during the suspension, would be switched back into the property fund.

Latest update

While the suspension was lifted, there was a delay in completing the following actions to get policies into the position they should be:

  • Stopping the redirection of regular payments into the cash fund so that future regular payments would be allocated to the property fund.
  • Switching into the property fund as a lump sum, the value of regular contributions that have been redirected into the cash fund during the suspension.

We’re pleased to confirm these actions have now been completed. It’s taken us longer than expected and we’re sorry for the inconvenience the delay may have caused. 

We’re writing to everyone who has been affected by this delay to confirm these actions have been completed. 

What does this mean?

This will apply to you if you were paying regular contributions into the property fund that were temporarily redirected to the cash fund during the suspension. We’ve now switched your investment in the cash fund back to the property fund, with effect from 10 May 2021. This is the value of your regular contributions that were redirected to the cash fund during the suspension, which began on 5 December 2019.

We’ve also removed the redirection so your regular contributions are now being invested back into the property fund.

Any changes made to policies as a result of lifting the fund suspension have been backdated to 10 May 2021. We’ve also taken into account any changes or requests that you may have made since the fund reopened. Your fund valuation and fund selection should now reflect the correct position.

The redirected contributions invested in the cash fund during the suspension had a “no unit price reduction” guarantee applied to them. The guarantee will have been applied automatically if it was a built in feature of the cash fund you were invested in. The following cash funds have this feature:

Linked Life cash funds

  • Prudential Cash (exSA) S1
  • Prudential Cash (exSA) S2
     

Linked Pensions cash funds

  • Prudential Cash Pre A
  • Prudential Cash Ser A
  • Prudential Ex-DSF Cash

If you were invested in another cash fund, work to calculate whether an adjustment is needed as a result of this guarantee will follow. We will update this page with more information in due course.

Background on the suspension of the property fund

Our linked Life and Pension funds were suspended from 5 December 2019, following the suspension of the M&G Property Portfolio (the underlying fund) on 4 December 2019.  

The fund manager (M&G) announced the lifting of the suspension on the underlying fund effective on 10 May 2021. We decided to lift the suspension on the property funds on the same day.

All the Prudential linked Life and Pensions property funds have reopened:

Linked Life property funds
Prudential M&G Property Portfolio (exSA) S1
Prudential M&G Property Portfolio (exSA) S2
Prudential M&G Property Portfolio Acc (exM&G)
Prudential M&G Property Portfolio S1
Prudential M&G Property Portfolio S2
Prudential M&G Property Portfolio S2 (Inc)
Prudential M&G Property Portfolio S3
Prudential M&G Property Portfolio S4
Prudential M&G Property Portfolio S4 (Inc)
Prudential M&G Property Portfolio S5
Prudential M&G Property Portfolio S5 (Inc)
PIA M&G Property Ser B
Linked Pensions property funds
Prudential M&G Property Portfolio Acc (Ex M&G)
Prudential M&G Property Portfolio Pre A
Prudential Ex-DSF M&G Property Portfolio Property
Prudential M&G Property Portfolio Ser A
PruFRIA M&G Property Portfolio

All M&G Property Portfolio funds, available on Retirement Account, Prudential International Investment Portfolio (PIIP) and Prudential Onshore Portfolio Bond (POPB) have also reopened:

GB00B7SX7S61 M&G Feeder of Property Portfolio Sterling I Acc*
GB00B842HT59 M&G Feeder of Property Portfolio Sterling I Inc*
GB00B89X8P64 M&G Property Portfolio Sterling I Inc
GB00B8FQVP09 M&G Property Portfolio Sterling D Inc
GB00B8FSZ434 M&G Property Portfolio Sterling A Acc
GB00B8FWH509 M&G Feeder of Property Portfolio Sterling A Inc
GB00B8FYD926 M&G Property Portfolio Sterling I Acc
GB00B8G9TT83 M&G Property Portfolio Sterling A Inc

* Retirement Account invests in the feeder fund, which in turn invests in the underlying fund.

Questions and Answers

No. We will be applying the redirection of regular contributions, switches from the cash fund and any applicable guarantee with effect from 10 May 2021. We’ll take into account any changes or requests that you may have made since the fund reopened.

Yes, any changes you made to your policy since the fund suspension was lifted have been completed. Your fund valuation and fund selection should now reflect the correct position.

Yes, since 10 May 2021 you’ve been able to switch or withdraw money, or transfer out of the underlying fund and the property funds.

Yes, since 10 May 2021 you’ve been able to switch investments into the underlying fund and the property funds.

We lifted the suspension at the earliest opportunity. The underlying fund, the M&G Property Portfolio fund, itself opened on 10 May 2021, following a notice period provided by the fund manager.

Regular pension contributions that would have usually been made into a linked Pensions property fund since 5 December 2019, were redirected to either the Prudential Cash Pension fund, an alternative fund of your choice or a mixture of both. The redirection into the cash fund has now been removed, with all future regular contributions that would have been diverted to the cash fund, being invested again in the property fund, with effect from 10 May 2021. 

We have re-invested the value of the previously redirected regular contributions in the cash fund back into the property fund (free of charge), using the property fund’s unit price on 10 May 2021. That value will take into account the cash fund’s “no unit price reduction” guarantee and will have been applied automatically if it was a built in feature of the cash fund you were invested in. The following cash funds have this feature:

Linked Life cash funds

  • Prudential Cash (exSA) S1
  • Prudential Cash (exSA) S2

Linked Pensions cash funds

  • Prudential Cash Pre A
  • Prudential Cash Ser A
  • Prudential Ex-DSF Cash

If you were invested in another cash fund, work to calculate whether an adjustment is needed as a result of this guarantee will follow. We will update this page with more information in due course.

Once the guarantee has been applied, it then ceases and is no longer applied to the switched contributions or any future contributions in the property fund.

Any regular contributions invested in an alternative fund(s) of your choice remain there. Any future regular contributions have not been redirected back to the property fund and will continue to be invested in the alternative fund(s).

Any regular contributions that were already being made into the Prudential Cash Pension fund before the suspension have not been moved. Any future contributions will continue to be invested there as before.

If you want to make any further changes, please get in touch. The quickest way to contact us is using our online service at pru.co.uk/online – here you can find out if the online service is available for your policy, or log in if you’ve already registered.

Retirement Account

Regular contributions in Retirement Account have not been switched. 

If you invest through the Retirement Account, directly in the underlying fund through the M&G Feeder of Property Portfolio fund - your regular contributions that were redirected to the cash account, during the suspension, remain invested there unless you tell us otherwise. 

If you want to make changes, you can ask us to update your investment profile by sending an email to RA.Investments@prudential.co.uk

With effect from 25 June 2021, the fund manager (M&G) made some changes to the investment objective and investment policy of the underlying fund. From the same date these changes were also reflected in the objective of the linked property funds.

The fund manager intends for the changes to make it easier to determine whether the underlying fund has achieved its objective, and to provide greater clarity on how it sets out to achieve this.

Updated property fund objective (effective from 25 June 2021)

Objective: The investment strategy of the fund is to purchase units in the M&G Property Portfolio - the underlying fund.

Underlying Fund Objective: The fund aims to carry on Property Investment Business and to manage cash raised from investors for investment in the Property Investment Business. In doing so, the Fund aims to provide a higher total return (capital growth plus income), net of the Ongoing Charge Figure and Property Expense Ratio, than the average return of the IA UK Direct Property Sector over any five-year period.

Previous property fund objective

Objective: The investment strategy of the fund is to purchase units in the M&G Property Portfolio - the underlying fund.

Underlying Fund Objective: The fund aims to carry on Property Investment Business and to manage cash raised from investors for investment in the Property Investment Business. In so doing, the fund aims to maximise long term total return (the combination of income and growth of capital) through investment mainly in commercial property.

No. While we have closed the Prudential UK Property S1 and S3 pension funds these were entirely separate from the Prudential M&G Property Portfolio funds.