MSE News: £60m compensation for Scottish Equitable pension savers

dunstonh

Why would any normal punter NOT expect their locked-in pension funds to do better than instant access savings accounts when they had elected as a result of volatile past performance in other fund options for their funds to be supposedly "rescued", moved out of rollercoaster equities, and held in meaningful totally cautious "cash" funds?

I can't explain why someone would expect a money market fund to act the same way as an instant access savings account. Perhaps people that think that should also be asked if they think tea tastes the same as coffee.

It simply is not possible unless they have been investing in something that was not actually cash at all, but was more like investing in highly geared banking stocks which when they failed were summarily scooped up for a song by other predator banks who instantly made a killing.

Ignoring your extreme example, money market funds typically invest at least 95% in money market instruments. These cover a range of securities from simple deposits to asset or mortgage backed securities. Some will attempt to deliver more attractive returns by investing in assets of a more high risk nature (sub prime debt for example). This is allowed by the IMA sector definition which allows 5% for these. However, that does allow for negative returns potentially.

Loughton_Monkey

peterbaker wrote: »

Hello LM

Tell me, did we really need to know about Latvian anything or Brazilian Copper? I was deliberately in cash on this one for the last 5 years. Aegon SE, Scottish Equitable, or whatever they call themselves could not even keep up with me and my simple savings accounts, let alone Cash ISA's, for example.

So you kept it in cash. Did you expect the fund manager to open up 3,568 Lloyds Vantage accounts and feed them all with £1,000 a month to get 4%? Sadly, he seems to be able only to get around 1.3% on institutional deposits.

May I suggest Latvian smaller companies, and Brazilian Copper mines next time?

peterbaker

Loughton_Monkey wrote: »

So you kept it in cash. Did you expect the fund manager to open up 3,568 Lloyds Vantage accounts and feed them all with £1,000 a month to get 4%? Sadly, he seems to be able only to get around 1.3% on institutional deposits.

And there you have it. Private punters can do miles better than so called fund managers, so why not just excise these unfit fund managers totally and without further ado from all UK pensions provision?

May I suggest Latvian smaller companies, and Brazilian Copper mines next time?

Very funny. Were you suggesting those two as "hot tips" as soon as the F16s started policing Latvia in 2004, or as soon as Brazil became the B in BRIC in 2003 ? I doubt it. It probably took you much longer to wake up to how those two "special opportunities" came and went.

cyclonebri1

I don't want to get into any serious or political issues here but does the original post indicate that there is any PAYBACK for avc/contributors who have seen there contributions decimated in the past at least get there money back???????????????

I lost about 8k if I recall, when our company bailed out from them for AVC's, and went with Norwich/Avviva

yelf

peterbaker wrote: »

Yes I was waiting for someone to utter that old and very useless chestnut, yelf. If companies cannot manage investments in the prevailing climate they should say so. But of course they don't say so. The prevailing climate is a smokescreen for all sorts of jolly wheezes. Would be a shame to give back the money and say "Sorry we seem to have lost the plot - perhaps you'd better put it under the mattress, Sir." Instead they shrug their corporate shoulders and say they must obviously levy charges to cover their overheads. Obviously? Why levy them on us if they can't even organise a booze up in a brewery?

Again, what fund(s) are we talking about here?

Thrugelmir

peterbaker wrote: »

0.5% is completely derisory. 1.1% is derisory. Taking 0.6% as a "charge" from the 1.1%, leaving just 0.5% is scandalous especially when the company has had the benefit of using that money not me.

While I'm agreement that the fees taken to manage funds are too high.

You are wide of the mark with this comment. As DH pointed out base rate is .5%. That's the rate that banks currently receive for depositing overnight money with the BOE. There is no comparison between retail and wholesale money markets.

You acted as a fund manager by deciding to withdraw from other investment funds into cash. So should accept responsibility for monitoring your own investments.

How long has base rate been at .5%?