Best way to monitor DC pension performance?

click86

I was wondering what the best way is to monitor pension performance?

Five years ago, the company I worked for at the time used the People's Pension.

When I left the business onto pastures new, I left the contributions in there.

I was a bit naive and didn't realise charges were a thing with pension pots so I imagine charges brought the value down a bit.

Anyway, a few jobs later, I'm now back with the People's Pension for my current role.

Any previous workplace pensions have been transferred into the same pot (just from an administrative perspective).

Looking at my pot, I've calculated all payments in (including transfers in from other schemes) and my current pot value is only £300 more than I've contributed.

This doesn't sound like a great return in five years on a 'medium risk' investment scheme (please correct me if I'm wrong).

Am I correct in saying this is the best way to monitor the performance, or us there a better way?

Thanks

Thrugelmir

How much is your fund worth?  Investments fluctuate in value. The best way of ensuring a decent pension is to save on a regular basis over the longest time frame possible. 

Albermarle

I was a bit naive and didn't realise charges were a thing with pension pots so I imagine charges brought the value down a bit.

Over the last 5 years most pension funds would have seen decent growth , for sure more than enough to cover any charges . The Peoples Pension charges are not that high.

Looking at my pot, I've calculated all payments in (including transfers in from other schemes) and my current pot value is only £300 more than I've contributed.

Without knowing the pot size it is difficult to comment on whether a £300 increase is good or bad.

[Deleted User]

Interestingly, Im also questioning my current Employers DC Pension performance. 
((Notwithstanding that for the 8% I contribute (via salary sacrifice) my employer contributes 12% so I fully appreciate Im "quids in" to start with))

BUT.........the 5 year performance of the fund (My employer's own Mixed Portfolio 40-85 Shares Lifecycle = Risk 7) has been signposted on the JLT/Mercer Administrator dashboard as having returns of 5-8% annual growth (at various times),.....................however, I want to ask questions of my Employer's Pension Manager as of 31st Oct 2020 (5 years & 9 months after starting the fund, it  is showing a balance of only £132k versus gross inputs of £123k and this does not equate to the headlines in the JLT/Mercer dashboard
I should add over the last 4 years, I have maxmised my pension top up and topped up this scheme and so it is funded annually to the tune of:
Employer £4,600
Me (via Salary Sacrifice) £22k
(Annual Pension Mgmt Charge Fees are 0.24% = how does this compare to other Employer run schemes........)

I recognise that the gross inputs stand to day at £123k but obviously they have not been in for alll the 5 years 9 months but a big proportion has been held for over 3 years...............Im feeling underwhelmed!!

Thrugelmir

Markets across the board have been in decline over the past 2 months. Hence my earlier comment.  5% -10% fall soon equates to a sizable amount of money once a pension fund is in 6 figures. Unless you plan to draw on the money soon, just ride the waves. 

Albermarle

You will get a more accurate view of the funds performance by looking at the data sheet or checking it in some other way .
Normally a mixed asset fund with a % equity around 60% ( if that is what it is )should have grown at about 6 to 7% a year on average over the last 5 years , even taking into account recent market moves.
Some of these funds have underperformed though usually partly due to having too high % in UK 

arnoldy

Unit-ise your DC fund and when you add money or take money out adjust the number of units = fairly simple maths. For example if you have 50k create 1000 units of £50. some time in the future your fund grows to 60k the units are worth £60. If you then add £3k you add 3/60 * 1000 units = 50 units. Your fund value is £63k and units 1050. 
Track the unit price against an index such as FTSE250 or NASDAQ or World Index to get a handle on your relative performance.

[Deleted User]

You need to do this across all your investments and savings. Calculate time weighted return and then compare against an appropriate benchmark.  

Here is a good spreadsheet for doing this property. https://www.bogleheads.org/wiki/Calculating_personal_returns