Frequently asked questions

A holding will be shown to two decimal places.

No you cannot link the smoothed fund to a model.

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 an RSP, this can continue at the current rate but cannot be amended.

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.

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.

Yes, the fund will be shown within back-office reports.

The value of the fund is smoothed and aims to increase at an Estimated Growth Rate (EGR) which reflects the longer-term growth expectations the fund manager 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.

A client can only have one Pension Savings Account. However, they can open multiple Pension Drawdown Accounts so they could do this when they move into the decumulation phase.

You can access the changes here.

The fund is intended to grow while providing some protection against the ups and downs of investing. 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.

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 expected growth rate EGR 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.

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.

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.

Standard Life calculate the EGR based on long-term growth expectations of the underlying fund. A review of the EGR is carried out typically on a quarterly basis, but may undergo an additional ad-hoc review if required.

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.

If the Underlying Fund 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. 

If the Underlying Fund 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.

Other than in specific circumstances (detailed below), once an investment has been made into the feeder fund a client cannot sell or switch this investment into another fund.

Exemptions:

• Regular income payments (i.e. where automated income transactions are set up and processed by the platform)
• Pension Commencement Lump Sum
• Lump sum death benefits
• Serious ill-health benefits
• Small pension pot payments (up to £10,000)
• The deduction of fund charges
• Facilitation of adviser charges
• Customers exercising their right to cancel their Fidelity Pension 
• Customers subject to a Pension Sharing Order

Three transactions (ad-hoc lump sums, UFPLS and transfers out) will all be subject to the 10 working day delay in the future. We will notify you when these delays are going to become applicable.

The smoothing mechanism is the differentiating factor and this is reflected in the costs.

Yes, all fees can be facilitated from the Standard Life Smoothed Return Pension Fund (but not from the feeder fund).

Yes, this is possible.

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.

A switch out of the Standard Life Smoothed Return Feeder Pension Fund directly into 'Exchange-Traded' Investments is not possible. Money from the Standard Life Smoothed Return Feeder 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.

The deal cut off time is 10.00am.

Current and historic EGRs and UPAs will be published here.

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.

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 section below
• An infrastructure failure preventing us from providing smoothing
• If the 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.

If this happens you will be notified.

The Smoothed Return Pension Fund has only recently been launched and therefore performance data will not be available for the first six months.

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.

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 days, a further instruction cannot be placed until 90 days have passed since the submission of the initial instruction.

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.

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. The fund will then settle after 4 working days (T+3) when Fidelity will then pay to proceeds to your client's bank account.

No, the 10 working day delay does not apply to regular income payments.

No, the Smoothed Return Pension Fund is not available for re-registration out as it is not available on any other platform. The Smoothed Return Pension Fund will be sold and transferred as cash.

Yes, the proceeds will then move to cash and then can be transferred out from Fidelity to another provider.

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.

Switches or a sell to cash

There are a number of transactions where the 10 working day rule does not apply. 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
• Plus customers subject to a Pension Sharing Order

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.

There will be no delay where an initial Pension Commencement Lump Sum is taken.

There is no delay for regular taxable income. However, there will be a delay for ad-hoc taxable income.

This is in order to prevent other sells or switches from being delayed.