Aegon Pension Loss

Pat38493

Marcon said:

Pat38493 said:

dunstonh said:

Pension providers do not move your funds without notification.   The lifestyle risk reduction process is documented and supplied and the decision is made by the pension holder if they want that or not.     The whole point of it is to automate the process for people that are not likely to be bothered to take on the decision-making for themselves or use an adviser to do it for them.

They are damned if they do and damned if they don't.

Right but it's often in the past been the default option that applied if you did nothing, and so I wouldn't necessarily describe you having been opted into something by doing nothing many years early, as clear and timeline notification.  I suspect that different pension providers have different approaches here because there was a thread a few weeks ago here where someone had been proactively notified that their move to a "retire year x" fund was going to kick in soon and they should take action if they did not want it.  To me that's good customer service regardless of legal obligations.

Experience has shown that if a customer has been entirely passive throughout the whole time they've been saving, they rarely wake up and do something (e.g. respond to an email or letter about fund choices) at the end of the process. That said, I completely agree it's a good idea to at least give it a go(!) - but that doesn't mean a provider is 'wrong' to follow longstanding instructions from a customer. 

Yes - however they might be more likely to act on receiving a letter saying "in preparation for your retirement we will be doing this".  

Also, it seems to me that there is an additional moral duty to act based on developments in recent years - after, all, if an investor has been completely passive for 40 years, they may have no idea that they are going to lose a lot of possible growth when the original default instructions targeted at purchasing an annuity kicks in.  

As far as I understand, many schemes would still move you into such an over cautious investment mix.  Surely given the pension changes that were initiated only about 10 years ago to flexibility, companies should be trying to alert pensioners.

I guess they would try to claim that this could be interpreted as "financial advice".

For one of my pensions, the documentation from my company says that I will be moved to the "appropriate fund for my retirement intentions" 7 years before my set retirement age.  How will they know that if they don't ask me?

Notepad_Phil

Pat38493 said:
Also, it seems to me that there is an additional moral duty to act based on developments in recent years - after, all, if an investor has been completely passive for 40 years, they may have no idea that they are going to lose a lot of possible growth when the original default instructions targeted at purchasing an annuity kicks in.  

As far as I understand, many schemes would still move you into such an over cautious investment mix.  Surely given the pension changes that were initiated only about 10 years ago to flexibility, companies should be trying to alert pensioners.

I guess they would try to claim that this could be interpreted as "financial advice".

I have a lot of sympathy for your post, but unfortunately I'm pretty sure there would be a fair number of pensioners crying to the newspapers if they changed their options due to such a letter and then equity markets dropped whilst bonds held up better (i.e. what more usually happens, rather than what happened last year). They might get nowhere, but the bad publicity is not going to help pension take up.

And perhaps annuities are starting to make some sense again, so I'm not 100% sure that I'd want the pension companies to 'encourage' people to the drawdown path. After all an annuity gives a guaranteed amount per month with no further action required from the pensioner, drawdown certainly doesn't give a guaranteed amount and for most people is likely to require some ongoing work to ensure the pot doesn't run out.

Pat38493 said:
For one of my pensions, the documentation from my company says that I will be moved to the "appropriate fund for my retirement intentions" 7 years before my set retirement age.  How will they know that if they don't ask me?

Presumably you set your retirement intentions when you chose your funds/pension company?

Qyburn

Pat38493 said:

Yes - however they might be more likely to act on receiving a letter saying "in preparation for your retirement we will be doing this".  

I received those count down letters from both Aviva and Royal London, and I can say pretty certainly that offering options on fund choices was not conspicuously presented, if at all. The main focus of the "are you on track" content was all about projected values at different (depressingly low) growth rates, and the sort of annuity income you might expect.

LHW99

Presumably you set your retirement intentions when you chose your funds/pension company?

If, unfortunately, this was 30 or more years ago, it is unlikely that anyone would remember what had been chosen, have probably lost the letters / forms filled in at the time, and wouldn't necessarily have realised the implication of any choice that was made.

It is very easy to forget that it is only relatively recently that people have been able to access information on their pensions almost at will, rather than being limited to a few (or many) pages of close packed information, using terms that were less than clear.

I can remember my amazement when I discovered that CEEFAX (remember that?) had moderately live share price information during the day. The way you researched funds would be to look at newspaper ads and / or write to a fund house and ask for their latest annual report.

The majority of people didn't have the time or inclination, and a proportion may not even have had a pension to worry about as many companies did not enrol workers until they had been in post for 2-5 years (and some didn't even do that much).

Marcon

Pat38493 said:

Marcon said:

Pat38493 said:

dunstonh said:

Pension providers do not move your funds without notification.   The lifestyle risk reduction process is documented and supplied and the decision is made by the pension holder if they want that or not.     The whole point of it is to automate the process for people that are not likely to be bothered to take on the decision-making for themselves or use an adviser to do it for them.

They are damned if they do and damned if they don't.

Right but it's often in the past been the default option that applied if you did nothing, and so I wouldn't necessarily describe you having been opted into something by doing nothing many years early, as clear and timeline notification.  I suspect that different pension providers have different approaches here because there was a thread a few weeks ago here where someone had been proactively notified that their move to a "retire year x" fund was going to kick in soon and they should take action if they did not want it.  To me that's good customer service regardless of legal obligations.

Experience has shown that if a customer has been entirely passive throughout the whole time they've been saving, they rarely wake up and do something (e.g. respond to an email or letter about fund choices) at the end of the process. That said, I completely agree it's a good idea to at least give it a go(!) - but that doesn't mean a provider is 'wrong' to follow longstanding instructions from a customer. 

Yes - however they might be more likely to act on receiving a letter saying "in preparation for your retirement we will be doing this".  

Also, it seems to me that there is an additional moral duty to act based on developments in recent years - after, all, if an investor has been completely passive for 40 years, they may have no idea that they are going to lose a lot of possible growth when the original default instructions targeted at purchasing an annuity kicks in.  

As far as I understand, many schemes would still move you into such an over cautious investment mix.  Surely given the pension changes that were initiated only about 10 years ago to flexibility, companies should be trying to alert pensioners.

I guess they would try to claim that this could be interpreted as "financial advice".

For one of my pensions, the documentation from my company says that I will be moved to the "appropriate fund for my retirement intentions" 7 years before my set retirement age.  How will they know that if they don't ask me?

That's why you provide your 'selected retirement age' at the time you sign up. Your annual benefit statement confirms the age, so up to you to check it/amend if you want to change it. 

Pat38493

LHW99 said:

Presumably you set your retirement intentions when you chose your funds/pension company?

If, unfortunately, this was 30 or more years ago, it is unlikely that anyone would remember what had been chosen, have probably lost the letters / forms filled in at the time, and wouldn't necessarily have realised the implication of any choice that was made.

It is very easy to forget that it is only relatively recently that people have been able to access information on their pensions almost at will, rather than being limited to a few (or many) pages of close packed information, using terms that were less than clear.

I can remember my amazement when I discovered that CEEFAX (remember that?) had moderately live share price information during the day. The way you researched funds would be to look at newspaper ads and / or write to a fund house and ask for their latest annual report.

The majority of people didn't have the time or inclination, and a proportion may not even have had a pension to worry about as many companies did not enrol workers until they had been in post for 2-5 years (and some didn't even do that much).

No they did not ask me whether I was planning to buy an annuity or take income flexibly.  

For many people that option would not have even existed at the time.

Taylor1928

i have had the same problem with Aegon, via my workplace pension is currently down over £50k,  I contacted the company pension advisor who told me pensions are a long term investment, ( when your 65 it does not feel like that), i have also written to the Pension Trustees. Aegon don't do anything and the funds are in Blackrock and im not a specialist so whilst i view the system i don't touch it, but I see every fund in the lifepath going down, and some of the losses are staggering but i see no management. I pay Aegon a fee to manage the fund (not watch it) which being realistic is being transferred automatically into a guilt proportion as i age, compounding my losses, so whilst they are legally in the right, their lack of due diligence in my view amounts to gross negligence . I have now contacted a independent financial advisor to look the fund lines, and advise how i can protect against the losses, including moving monies out into different products. Note my Standard Life pension is 2% up so some companies are working harder, but the value in that is a lot less. As far as i can see i have no regress on Aegon but as an individual who has put into schemes all my life and i know i feel ripped off, 

dunstonh

i have had the same problem with Aegon, via my workplace pension is currently down over £50k

a) that is not a problem
b) it has nothing to do with Aegon.

 i have also written to the Pension Trustees. 

To wish them a happy easter?

Aegon don't do anything and the funds are in Blackrock and im not a specialist so whilst i view the system i don't touch it, but I see every fund in the lifepath going down

In which case there is possibly a problem as the markets peaked in Nov/Dec 2021 and fell to around July 22.  Then went up in August but fell again and hit the low point in October.  Since then, they have zig zaged upwards and values are not far off what they were in July 22.

Aegon are not meant to do anything.  

, and some of the losses are staggering but i see no management.

The BlackRock funds are index trackers.  They track the market.  There is no management with these.    And management wouldn't make much of a difference.   If the fund remit is say, to invest in UK gilts and it can only invest in UK gilts.  Even if Gilts are not having a good time and heading down.

 I pay Aegon a fee to manage the fund

No you do not.  You pay Aegon to handle the pension administration.   Not to manage the funds.   You or your financial adviser select the funds.

 so whilst they are legally in the right, their lack of due diligence in my view amounts to gross negligence .

It doesn't amount to gross negligence.   It amounts to you not understanding what is going on and jumping to incorrect assumptions.

 I have now contacted a independent financial advisor to look the fund lines, and advise how i can protect against the losses, including moving monies out into different products. 

An IFA cannot change how the markets perform.   Investments will have negative periods and positive periods.  They go up and down a daily basis.     The losses in 2022 were largely down to market sentiment over rising inflation, rising interest rates, Ukraine war, Gordon Browns changes to pensions finally coming home to roost,  The unwinding of the quantitative easing that started after the credit crunch, liquidity concerns from Japan, currency movements, recession fears and a whole load of other things.

None of which could be changed by an IFA.  Yes, an IFA can adjust the funds but if an area is going to go down then it will go down whether an IFA has selected it, you have selected it or its a default of the product you are in.

 Note my Standard Life pension is 2% up so some companies are working harder, but the value in that is a lot less.

What are you invested in with Std Life?    
Over what period are you comparing it?
SL, on their old plans, had a WP fund with a guaranteed growth rate.   People on that get a small annual growth of around 2.x% a year.  However,  when you compare it to using funds like those available from Blackrock, it would underperform in most years.   It will typically only look good in negative years.   Which occur about 1 in 5 years.

 As far as i can see i have no regress on Aegon but as an individual who has put into schemes all my life and i know i feel ripped off, 

You could remove that feeling of being ripped off by actually learning about what you have and how these things work.   Ranting may make you feel better but it wont fix the problem.  And the problem is your lack of knowledge and understanding.

Albermarle

No you do not.  You pay Aegon to handle the pension administration.   Not to manage the funds.   You or your financial adviser select the funds.

Although normally with workplace pensions, if the client does not actively choose a funds(s) , the money goes into a default fund. AIUI, the large majority of workplace pension clients are in these default funds, as the large majority take no interest in their pensions, until something goes wrong and/or they get close to taking the pension.

dunstonh

Although normally with workplace pensions, if the client does not actively choose a funds(s) , the money goes into a default fund.

Correct.  But the choice to use the default fund is still a choice.

 AIUI, the large majority of workplace pension clients are in these default funds, as the large majority take no interest in their pensions, until something goes wrong and/or they get close to taking the pension.

A fair assessment.