Investments, Events - Switching Funds for a
Regular Premium Contract
This type of activity occurs frequently with pensions, where regular contributions start in an “Initial Units” fund then, after a year or two, go into an “Accumulation Units” one.
In the example described in this section, a premium of £200 per month has been used to pay equal £100 monthly contributions into two funds since 01/01/2005. The fund switching events discussed include…
- Stopping contributions to one fund
- Reducing contributions to another fund
- Starting an entirely new fund, using the contributions released by 1 and 2 above
- Transferring-out from the stopped fund (1 above)
- Switching-in to the new fund (3 above)
Stop Contributions to Both Funds
To stop one fund and reduce the other (items 1 and 2 above) you first need to put an end date on the “Purchase, initial” event that started them both. To do so, starting from the Funds screen, above…
- Click the “Show events (e.g. switches)” option
- On the Events screen click “Edit”
- On the “Edit Event” pop-up enter the date at which point this level of contribution stopped (e.g. 01/12/2006, as shown below)
- Click “OK”
- Check that the current valuation is correct, and edit the fund details if required.
- In the example below the total investment (for the first two years at £200 p.m. is now £4,800).
Restart Second Fund with New Contribution
- Click “Add” and choose to “Add an event”
- Select Event type “Transaction between acquisition and closure”
- Select Action “Vary regular premium”
- Enter the reduced premium for the second fund (e.g. £50)
- Enter its period and the dates for this varied premium (e.g. from 01/01/2007)
- Select one of the (existing) funds
- Click “OK”
- When you return to the Events or Funds screens you should see the revised premium and overall investment (i.e. total premiums to date, which in this example is £5,100.00)
Start Entirely New Fund
- Click “Add” and choose to “Add an event”
- Select Event type “Acquisition of contract or fund” (n.b. because it’s a new fund)
- Select Action “Purchase, initial”
- Enter the premium for the new fund (e.g. £150 per month)
- Enter its period and the dates for this varied premium (e.g. from 01/01/2007)
- Click “Add” and select the new fund
- Click “OK”
- When you return to the Events or Funds screens you should see the revised investment (i.e. total premiums to date, which in this example is £6,000)
Transfer-out of the Stopped Fund
- On the Funds screen double-click the fund you wish to transfer-out of and ensure its valuation is correct at the date of transfer (e.g. £2,796.00 in the current example)
- Click “Add” and choose to “Add an event”
- Select Event type “Closure of contract or fund” (n.b. because it’s coming out of an existing fund)
- Select Action “Transfer-out between funds”
- Enter the value to transfer out (e.g. £2,796.00)
- Enter the date of the transfer (e.g. from 04/06/2007)
- Click “Add” and select the existing fund
- Click “OK”
- When you return to the Funds screens you should see…
- the fund’s “Current Sum” set to “Sold”
- the “Uninvested” monies field in the Contract Summary contains the transferred sum (e.g. £2,796.00 in the example below)
Switch-in to the New Fund
- Click “Add” and choose to “Add an event”
- Select Event type “Transaction between acquisition and closure” (n.b. because it’s going into an existing fund)
- Select Action “Switch-in to existing fund from this contract”
- Enter the value to switch in (e.g. £2,796.00)
- Enter the date of the transfer (e.g. from 04/06/2007)
- Click “Add” and select the fund
- Click “OK”
- When you return to the Events screens, below, you should see…
1. The initial purchase (at £200 per month) stopped (in this case on 01/12/2006)
2. The on-going premium for one of the funds varied (down to £50 per month from 01/01/2007 in this example)
3. An on-going premium started to a new fund (in this example a “Purchase, initial” of £150 per month from 01/01/2007)
4. A transfer-out from the stopped fund (of £2,796.00 in this example)
5. A switch-in to the new fund
