Company Pension with Aviva- Fund Choice

jj65

I’ve just started a new job and the company pension is with Aviva and the default is for it to be invested in the Aviva Mixed Investments Annuity Lifestyle approach which starts with 100% in Aviva Mixed 40-85% Shares S6. How do I judge if this is an appropriate fund for me, and also how do I then decide which of the numerous funds that Aviva offer is the most appropriate?

My initial impression is that is probably not the right fund as I have a previous DB pension, and that I could take a bit more risk and also that I’d be prepared to leave it invested so that the Lifestyle approach is not appropriate.

Any thoughts and suggestions much appreciated.

Linton

You current pension fund is about 70% in equity and 30% in bonds, property etc. Of the equity portion 40% is invested in the UK market and 60% elsewhere.


You could increase the equity up to 100% if you wished but 70% is not unreasonably low. Many people on this forum would consider UK equity % very high and a greater % of foreign investments would be preferable.


So overall I dont think your current fund is wildly sub-optimal but a change could be advantageous in your situation. The Lifestyling does not seem to fit with your situation.


Can you invest in any Aviva fund, of which there are a vast number or does your employer's scheme only offer a restricted choice? How old are you? The Lifestyling doesnt make any difference until 10 years before your specified retirement date.

jj65

Thanks. I’m 12 years to retirement. At the moment it is not fully setup so I can’t see if I have a full choice of funds but I’ll check as soon as I can.
I guess a simple option would be to just turn the lifestyling off.

cfw1994

Mine is also with Aviva (from Friends Life originally).
I don't recall the default, but a couple of us spent some time looking at the fund summary docs for some considerable time perhaps 10 years ago (perhaps a similar time from retirement to you!), & surmised that whilst the default was 'okay', there were others that appeared to consistently beat it. I know, past performance, etc etc, but I felt it worth shuffling things about a bit.

Since then, I have adjusted (just tweaked really) the mix perhaps 2 or 3 times after more studying of the funds. Again, I am NOT a financial advisor, but am reasonably capable of comparing multiple possibilities!

I would strongly recommend spending a Sunday printing off the top 10 funds you might be able to shunt between at low cost and doing some research: perhaps your default is okay....

FWIW (& again, I appreciate I am not a professional!), I currently have:

40% - BlackRock World ex UK Equity Index Tracker FP
20% - North American FP
10% - Global Equity Fund of Funds FP
10% - Global Equity FP
10% - BlackRock Over 15 Year Corporate Bond Index Tracker FP
10% - BlackRock Over 15 Year Gilt Index Tracker FP

The last two were a recent change as I approach a hopeful early retirement to marginally lower the risk. I am hesitant to push a large lump into cash, even though I feel the markets are well overdue a 'correction', which I personally feel could be perhaps 20%. Mind you, I have felt that for some time now, & if I had shunted a load (eg 20+%) into cash 18 months ago, I'd have missed out on some huge gains since then....if anyone DOES have that foresight, feel free to share! My approach has been to also have some cash savings in ISAs, etc, to enable a year or two of living without touching funds

I do appreciate there is some overlap (strong in the Global Equity space!), but I am kind of hedging my bets with those just to average out the returns to avoid just picking the worst one.

Mostly only 0.25% fees, which I feel is important, & I'm happy how things have gone the past 5 years or more.
Recently moved a Fidelity lump into this - the Fidelity one had no other benefits and had flat-lined for some years. Considering moving a couple of other small pensions...but they have grown a little. Happy that moving the Fidelity one was painless, & really would prefer the simplification of fewer tiny pots.

Hope this helps

cfw1994

Merry Christmas all!
Hope the market in the months and years ahead leave less indigestion than Christmas leftovers & pre-Christmas run has..... :eek: ....down about 4% for the past quarter (in reality, worse, as I am still paying in!), but on the bright side, the previous Q was 11% up (or less, as I am still paying in...you get the idea!)

Anyone here knowledgable about Aviva?

As seen above, 10% of my funds was with their Global Equity Fund of Funds.
In mid-Nov, they wrote to tell me that was being moved to Schroder.
They imply it is a single fund, not the fund of funds as before:

"we are changing the investments held by the fund. It will no longer invest directly in a range of other funds, but instead will invest in a single fund"

so clearly something has 'properly' changed, but they also state it has a charge of 0% (yes, zero).

I have swapped a few emails with their pensions people during December to ask for a funds document for this new fund.
Aside from confirming the AMC is indeed 0% (I still suspect this is incorrect!), nothing has come back on the details of the fund, & now my first payment has gone to it.

I'm absolutely sure it will be just dandy, but I am mildly irritated that they are refusing to provide ANY information about it.

If any of you knowledgeable folks here know what is going on there, I'd welcome the information. Before I start the new year passing them a formal complaint