PIPA declared investment return

Pension Income Plus Annuity - Declared Investment Return

We aim to add Declared Investment Returns (or DIR) to provide steady growth

These will vary from time to time (and may be negative and reduce your income). We'll add any DIR to your basic annuity after allowing for your chosen assumed investment return (AIR).

If the DIR added is higher than your chosen AIR, then your income will increase. Similarly, if the DIR added is lower than your chosen AIR, then your income will decrease. Your income will be guaranteed to not fall below the minimum income shown in your policy schedule.

Declared investment returns reflect:

  • Investment performance of our With-Profits-Fund
  • The annual charge applied
  • Our current approach to smoothing
  • Our own and/or industry mortality experience (which means we look at trends of when people die) and how we think they might change in future.

We currently declare investment returns four times each year 

These will apply from 1 February, 1 May, 1 August and 1 November.

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The DIR applied to your policy will relate to the declaration on or immediately preceding your policy anniversary and depend on the entry date of your Pension Income Plus Annuity.
 
Any mutual bonus allocated to your policy increases the income you receive (before any guarantee is applied). Unpaid mutual bonus allocations do not form part of the guaranteed benefits, so might be taken away in the future. However, we would do so only in exceptional circumstances, for example if it were required to protect our financial solvency.

In addition to the DIR, PIPA policies benefit from mutual bonus and exit bonus . Mutual bonus uplifts policyholder income annually by the most recently declared rate. The most recent declaration was 1%.

Exit bonus has been applied to policyholder income as a one-off uplift. The current rate of exit bonus can go up or down, resulting in increases or decreases to policyholder income.

In the unlikely event that our financial strength was to reduce to an unacceptable level, both mutual bonus and exit bonus can be reduced or removed entirely. In these circumstances, we currently expect to reduce the exit bonus first and then we’d look at potentially reducing the mutual bonus.

We add mutual bonus and exit bonus as an addition to the income you receive, before allowing for any guarantees. These bonuses do not increase your guaranteed minimum income.

Further information about mutual bonus and exit bonus can be found at LV.com/mutualbonus and LV.com/LVdifference.

We publish a brochure called "Your guide to how we manage our with-profits business" which describes in more detail how we decide the declared investment returns,  and the mutual bonus and exit bonus, and explains how we operate our with-profits business. You can also find further information in your Pension Income Plus Annuity policy conditions.

Our most recent declared investment returns are shown below:

Entry-Date in the quarter beginning Declared Investment Return
1 August 2012 1.75%
1 August 2013 1.75%
1 August 2014 1.75%
1 August 2015 1.75%
1 August 2016 1.50%
1 May 2012 4.50%
1 May 2013 4.50%
1 May 2014 4.50%
1 May 2015 4.50%
1 May 2016 4.50%
1 February 2012 7.50%
1 February 2013 7.50%
1 February 2014 7.50%
1 February 2015 7.50%
1 February 2016 7.50%
1 November 2011 7.25%
1 November 2012 7.25%
1 November 2013 7.25%
1 November 2014 7.25%
1 November 2015 7.25%
1 November 2016 7.00%
Entry-Date in the quarter beginning Declared Investment Return
1 August 2012 1.75%
1 August 2013 1.75%
1 August 2014 1.75%
1 August 2015 1.75%
1 August 2016 1.50%
1 May 2012 4.50%
1 May 2013 4.50%
1 May 2014 4.50%
1 May 2015 4.50%
1 May 2016 4.50%
1 February 2012 7.50%
1 February 2013 7.50%
1 February 2014 7.50%
1 February 2015 7.50%
1 February 2016 7.50%
1 November 2011 7.25%
1 November 2012 7.25%
1 November 2013 7.25%
1 November 2014 7.25%
1 November 2015 7.25%
1 November 2016 7.00%