Prices and performance charts

Market Depreciation Discounts

If the assets of the Pension Assured Fund are not performing well, the value of each unit is reduced. When this happens, bonus units are usually reduced by more per unit than basic units. The Market Depreciation Discount factor, by which units may be reduced, is decided by Aviva and changes each month. Historic Market Depreciation Discount factors for the fund are also available.

MDD - Calculation

BASIC unit value before MDD

=

£1.00

BONUS unit value before MDD

=

£1.00

1. BASIC unit value after MDD

=

BASIC unit value before MDD – (BASIC unit value before MDD x BASIC unit MDD)

2. BONUS unit value after MDD

=

BONUS unit value before MDD – (BONUS unit value before MDD x BONUS unit MDD)

3. Total PAF Holdings value after MDD

=

(BASIC unit value after MDD x Number of BASIC units held) + (BONUS unit value after MDD x Number of BONUS units held)


Please note: Aviva’s calculation is more complex than in the example below and therefore may differ from the results you work out using the latest factor and your latest PAF holdings. However, this will give you an indication of the value of the reduction you may incur if you leave the PAF and there is a Market Depreciation Discount (MDD).

MDD - Calculation Example

Based on a member who is 40 years old and who holds 80 BASIC units and 20 BONUS units, the following is a calculation example:

Total PAF Holdings value before MDD

=

(£1.00 x 80) + (£1.00 x 20)

=

£100.00

1. BASIC unit value after MDD

=

£1.00 – (£1.00 x 0.000)

=

£1.00

2. BONUS unit value after MDD

=

£1.00 – (£1.00 x 0.118)

=

£0.882

3. Total PAF Holdings value after MDD

=

(£1.00 x 80) + (£0.882 x 20)

=

£97.64

Also in this section

Watch and learn

RPS_icons_video_46x46_v2

How do you feel about investment risk?