Pizz Poor Pension Fund Retuns?

AnotherJoe

missile, the first letter shows two funds, two values.
The second letter has no reference to the two funds and just one value.

Something strange going on.

missile

AnotherJoe wrote: »

missile, the first letter shows two funds, two values.
The second letter has no reference to the two funds and just one value.

Something strange going on.

You are correct.

We do not understand why CM did not provide a detailed statement detailing fund(s). Perhaps there has indeed been a mistake and we shall ask CM to explain and give a more comprehensive response to our valuation request.

dunstonh

missile wrote: »

How can you make such glib false assertions? I have shown you the statements which prove her fund made a loss.

Doesnt mean the information is correct.

How do you explain the fall in fund value when one of the funds cannot lose value and the other has CM showing no funds in that area that have suffered a capital loss?

Why are you so willing to accept something that is clearly wrong?

Obviously my wife could and with hindsight perhaps would have monitored her investments better. I am sure she is not the only pensioner who trusted her employer / pension provider to manage her funds.

Correct. She should have monitored them better.
It is not the remit of the pension provider or the employer to make those decisions.

Also, who says that the performance has been bad? The Aegon fund has been doing better than average and returned more than you have said.

bowlhead99

missile wrote: »

Even AEGON have admitted that her pension fund has not kept pace with RPI. See attached >

That letter does not state that the pension fund has not kept pace with RPI.

It says that the tax free lump sum was £x back in April 2006. It says the selection of the figure to use for the tax free lump sum at 2006 was the greater of two numbers:

- 25% of the pension fund ; or

- the agreed lump sum at the time she left the employment, plus inflation from leaving employment to April 2006.

The reason for doing the calculation (in 2006) was to see whether or not a lump sum of higher than 25% was allowed for that pension, following implementation of "A-day" rules on 5 April 2006. If the number promised to you by your scheme, adjusted for inflation from leaving to April 2006, was higher than 25% of what the fund was worth (when they looked at it in April 2006), then that special privilege of having a lump sum higher than 25% can in some circumstances be kept. Known as a protected lump sum.

So, the letter is confirming to you that the "promise on leaving employment, plus inflation to April 2006" was in 2006 still over 25% of the fund value.

Now, what has any of that got to do with whether the fund has grown faster than inflation over he last decade to now, late 2016 or early 2017?! The letter didnt say what the fund was worth then and now or give any comments about the performance of the pension over the last decade or two. It was a letter saying that there is a protected lump sum arrangement and noting that whether you can keep that after a transfer depends on transfer method and destination.

Your contention is that Aegon fund has grown only 1.5% annualised. Based on the type of fund and its predecessor, Dunstonh thinks it's more likely it has done quite a bit more. You have suggested that Aegon are admitting it has not beaten inflation over the last decade but they have not made a single comment about that in the letter you scanned in - which you appear to have misread ?

Sorry if this feels like you are running round trying to prove yourself to us. We are only trying to help. If you show us the letters which support the performance claims, perhaps some light can be shed.

I agree with the others above that given you had two funds worth over £2k each with CM, one of which can't fall and the other of which is not likely to have fallen, the letter they sent showing only £3k odd is quite likely just to be one policy, missing the other, whereas last time they pulled them up off one common ID number. Perhaps a clerical(forgive the pun) error. This is why it is worth following up saying you were expecting to get the value of two policies and asking what has happened. Rather than running off thinking both CM and Aegon have performed terribly and taking drastic measures.

missile

bowlhead99 wrote: »

That letter does not state that the pension fund has not kept pace with RPI.

It says that the tax free lump sum was £x back in April 2006. It says the selection of the figure to use for the tax free lump sum at 2006 was the greater of two numbers:

- 25% of the pension fund ; or

- the agreed lump sum at the time she left the employment, plus inflation from leaving employment to April 2006.

The reason for doing the calculation (in 2006) was to see whether or not a lump sum of higher than 25% was allowed for that pension, following implementation of "A-day" rules on 5 April 2006. If the number promised to you by your scheme, adjusted for inflation from leaving to April 2006, was higher than 25% of what the fund was worth (when they looked at it in April 2006), then that special privilege of having a lump sum higher than 25% can in some circumstances be kept. Known as a protected lump sum.

So, the letter is confirming to you that the "promise on leaving employment, plus inflation to April 2006" was in 2006 still over 25% of the fund value.

Now, what has any of that got to do with whether the fund has grown faster than inflation over he last decade to now, late 2016 or early 2017?! The letter didnt say what the fund was worth then and now or give any comments about the performance of the pension over the last decade or two. It was a letter saying that there is a protected lump sum arrangement and noting that whether you can keep that after a transfer depends on transfer method and destination.

Your contention is that Aegon fund has grown only 1.5% annualised. Based on the type of fund and its predecessor, Dunstonh thinks it's more likely it has done quite a bit more. You have suggested that Aegon are admitting it has not beaten inflation over the last decade but they have not made a single comment about that in the letter you scanned in - which you appear to have misread ?

Sorry if this feels like you are running round trying to prove yourself to us. We are only trying to help. If you show us the letters which support the performance claims, perhaps some light can be shed.

I agree with the others above that given you had two funds worth over £2k each with CM, one of which can't fall and the other of which is not likely to have fallen, the letter they sent showing only £3k odd is quite likely just to be one policy, missing the other, whereas last time they pulled them up off one common ID number. Perhaps a clerical(forgive the pun) error. This is why it is worth following up saying you were expecting to get the value of two policies and asking what has happened. Rather than running off thinking both CM and Aegon have performed terribly and taking drastic measures.

My interpretation of that statement is the 25% tax free lump sum has not kept pace with RPI.
I have already posted copies of letters to support my original post.
I have posted that we are not pleased with the performance. My wife phoned for an explanation and she will be writing to both companies.

missile

dunstonh wrote: »

Doesnt mean the information is correct.

How do you explain the fall in fund value when one of the funds cannot lose value and the other has CM showing no funds in that area that have suffered a capital loss?

Why are you so willing to accept something that is clearly wrong?


Correct. She should have monitored them better.
It is not the remit of the pension provider or the employer to make those decisions.

Also, who says that the performance has been bad? The Aegon fund has been doing better than average and returned more than you have said.

I have posted evidence to support my post. If you choose to disbelieve me, I cannot see any point in responding to your insulting comments.

bowlhead99

missile wrote: »

My interpretation of that statement is the 25% tax free lump sum has not kept pace with RPI.

Ok, but now you have had the terminology and concept explained a bit, you're hopefully in a position to re read the statement and understand it.

It does not make any reference to performance after 2006. It does not say the fund failed to keep up with RPI before 2006 either for that matter.

It is a general statement explaining where the protected lump sum for the purposes of the April 2006 rules came from. They said that at April 2006, the figure "lump sum at leaving employment, increased by RPI to April 2006" was a number which was greater than 25% of the fund value.

That could be the case if for example you had a £1000 fund at leaving employment with a £333 lump sum amount allowed. If the fund grew by 10% a year, and RPI was 5% a year back in those days, then in two years between leaving work and getting to April 2006, the fund could have grown to £1210 and the lump sum plus RPI could have been £367. This "lump sum plus RPI from leaving employment to 5 April 2006" would be over 25% of the fund size at that time (in fact, it would be 30%).

So when the "A-day" rules came in during 2006 and said I couldn't have a lump sum of over 25% any more on the standard pension I was joining at the time, the calculation showed that your lump sum level (which with inflation was more than 25%of your fund), was a valuable benefit and you would not have to put up with 25% like the rest of us - you got a special protected lump sum level.

In the letter they tell you the actual lump sum would be calculated on retirement and that you may or may not be able to keep that special "protected lump sum" through a transfer, as it depends on some things like destination and method.

Nowhere does it say how the fund performed from the April 2006 calculation date to the letter date some ten and a half years later. It literally says "At 5 April 2006 the tax-free lump sum was [hidden]". It does not say what it is now, it says that would be calculated on retirement. Nor does it say what the total fund value was on 5 April 2016, or now.

As such, you really can't interpret it that "the lump sum has not kept pace with RPI" because it doesn't tell you what your lump sum is now, or your fund size is now. The only figure given is ten and a half years old, right?

missile

Thanks for your fuller explanation.

My wife is disappointed with (what would appear to be) the very poor compounded return on her fund since 2006. She has written to AEGON and requested their comment.

Similarly she has written to CM.

bowlhead99

Thanks. Please update the thread when you find out the responses as it's always good to know how these things turn out.

atush

Malthusian wrote: »

If we're not going to be told what the Clerical Medical pension was invested in that managed to lose 50% since 2005 (FTSE World return in same period: +234%) then I call wind up.

I had a look at Clerical Medical's pension fund list and their worst performing fund over that period (not including cash funds) was GMPP Equity, which is up 20%. Still dire but not even close to losing half its value.

I completely AGREE with this. There is no way any normal (ie not a conventional investment )fund would have done this badly.

Give us actual facts ie names of funds invested in.

Most of us trust that a reputable company will employ fund managers who can choose better funds than we can.

Most of us understand that reputable management companies run investment funds. And dont give you individual advice or arrange things for you. Did you employ an IFA?