With profits funds smooth the returns to a fund over the years, it is important to protect the policyholders remaining within the fund. At any moment in time there remains a smoothing of profits and losses and money coming in and out of the with profits fund. Some of the profits within years of exceptional returns are held over to provide bonuses in years of poor returns. A large number of transfers out of a pension fund can seriously deplete the level of profits held. A Market Value Adjustment is the insurance company's way of protecting the remaining policyholders, compensating and protecting the remaining fund. In addition if the underlying investments are performing poorly, a small number of transfers out of the fund can affect the fund and an insurance company may feel that a Market Value Adjustment needs to be applied in the event of you transferring. This can reduce your transfer value quite dramatically, and it is important that you contact your pension company to see if they are applying an MVA at the moment.