Penfold vs Nest

nig3d

Hi,

For several years my pension was with Nest, then my employer rolled my in with Penfold. I didn't move the money from Nest (even if Penfold asked for it relentlessly) because I wanted to measure the performance. I am with Penfold now for more than 1 year, almost 2. Penfold performance is around 8%, Nest is 18%. I am then thinking to go back to Nest. Any thought?

El_Torro

You won't be able to get your employer to pay into a pension fund that isn't Penfold, so you're stuck with that, at least for contributions. You may be able to do a partial transfer to Nest or some other platform. 

From what you say I wouldn't assume that Nest is inherently better than Penfold, especially based on 2 years worth of data. Also if you change the fund you're investing in with Penfold you might find that the new fund performs as well or better than the fund you're using at Nest. 

As always the fund you're using is more important than the platform you're using. 

nig3d

El_Torro said:

You won't be able to get your employer to pay into a pension fund that isn't Penfold, so you're stuck with that, at least for contributions. You may be able to do a partial transfer to Nest or some other platform. 

From what you say I wouldn't assume that Nest is inherently better than Penfold, especially based on 2 years worth of data. Also if you change the fund you're investing in with Penfold you might find that the new fund performs as well or better than the fund you're using at Nest. 

As always the fund you're using is more important than the platform you're using. 

thank you, yeah i thought it wasn't so simple. nest could have bought bonds/shares when they were cheap for example. I don't have much control on both platforms of course, except for the "level of risk". 

I didn't know I have to stick with what the employer offer, I thought it was my choice to decide what company to go with.

dunstonh

 I am with Penfold now for more than 1 year, almost 2. Penfold performance is around 8%, Nest is 18%. I am then thinking to go back to Nest. Any thought?

You have told us the name of the administrator for the pensions but not told us anything about the investments.   That is what matters when you are talking returns. 

e.g. what if you are in a high risk fund with NEST (which is likely) but a low risk fund/model with penfold?   Returns wont be down to the pension provider but your choice of risk.

nig3d

well if you know what it means with Penfold I have a Standard Level 3 plan, which has already a lot of shares

66% Stocks

29% Bonds

5% Other

with Nest I have a NEST Retirement Date Fund which is not a high risk fund.

Bimbly

nig3d said:

I didn't know I have to stick with what the employer offer, I thought it was my choice to decide what company to go with.

You can, indeed, start a pension with any pension company you chose.

However, your employer pays some contributions into your pension as well as the portion which comes out of your salary. If you ditch your employer's pension completely, you'll also lose your valuable employer's contribution (often referred to as "free money").

You could, if you wanted, keep the employer's pension in Penfold, paying in enough to get the maximum contribution from your employer, while also opening a pension with another company to pay in extra. Not everyone can afford this, of course.

dunstonh

with Nest I have a NEST Retirement Date Fund which is not a high risk fund.

its higher risk until it starts de-risking as you start getting closer to the "date".  Its higher risk than Penfold.

Penfold is a basic option that uses the off-the-shelf- Blackrock MyMap fund (version 3, 4 6 and 6).  Its actually quite an expensive way to access those funds.  (0.75% p.a. whereas you can get half that  elsewhere and even better for comparable alternatives)

So, in reality, its likely that neither Nest or Penfold are the best place.