should I use an IFA

FatherAbraham

kidmugsy wrote: »

Plus mortals in private Defined Benefit schemes.

Really? I never bother to look at the investment strategy of the DB pension fund of the large UK telecommunications firm I used to work for when a child, and from which I hold moderate deferred benefits (but a massive part of my retiremnt funds, if I were to work out the equivalent capital value).

The firm is making enormous deficit-reduction payments every year to the fund (those poor shareholders!).

If the firm goes bust, and the pension fund can't discharge its liabilities, the state's Pension Protection Fund steps in, and I still get 90% of my bennies. I don't even have to pay PPF premiums -- the pension fund itself does (ergo my ex-employer).

I can't really lose (10% maximum loss is nothing to someone who's investing in DC schemes).

The only way I lose out is coincidental -- as a DC pension-fund-holder, I am indirectly a shareholder in far too many firms with DB liabilities.

Warmest regards,
FA

kidmugsy

FatherAbraham wrote: »

If the firm goes bust, and the pension fund can't discharge its liabilities, the state's Pension Protection Fund steps in, and I still get 90% of my bennies.
FA

On the contrary, even if the PPF were big enough to rescue a huge DB scheme, one could lose far more than 10% since the index-linking on the compensation is capped at 2.5% p.a. That cap may not matter to anyone whose deferred pension is anyway capped at 2.5% p.a., but anyone currently with uncapped index-linking would be really, really browned off if we had another spell of inflation like that in the seventies.

Wilkins

FatherAbraham wrote: »

Why would a public-sector-pension-scheme member give a flying fig about a scheme's "investment style"?

TPS doesn't have one, since there's no fund. It's sheer state liability.

LGPS is funded, but the quality of the investment style is only of concern to the party with the liability -- superficially the legal employer, more profoundly the local taxpayers.

Only unfortunate mortals with defined-contribution pension pots need to care about "investment styles".

Warmest regards,
FA

Indeed, "investments style" was a silly phrase. I meant that the OP might wish to consider the implications of the funding style for the schemes, since both have issues.

BTW, I have known people in PS DB schemes who do take an interest in the investments, often not for financial reasons.