30,000 Irish holders of pensions, or investment funds with Standard Life faced bad news today as the company announced it was cutting its bonus payments on with-profits policies.
A company spokesman said this would reduce the value maturity and retirement payouts by about 15%, and he said the company was also increasing the early exit penalty for leaving the fund from 10% to 15%.
With-profit policies try to allow investors smooth the severe ups and downs of the stock market, by holding back payments in good years to make up bonuses in bad years.
However the continuing poor performance of stock markets has made it impossible to maintain bonus payments at the current level.
Hibernian Life & Pensions, and Equitable Life have been amongst companies making similar decisions in recent months.
A spokesman for Standard Life said that compared with stock market declines of up to 30% last year, the reduction in the value of with profits products showed they were still a good investment choice.
