Pension Provider investing 30% of my Pension in a Fund performing worse than -20% for 3 1/2 years!!!

leosayer

dunstonh said:

leosayer said:

Mr_Angry_from_Odiham said:

I should NOT have to do this and I am not a seasoned investor so there is some inherent risk.  But I believe I can do a better job of selecting more appropriate FUNDs to invest in than [Pension-Co] has demonstrated.  

Which funds would you have invested in?

Have you calculated your loss?

I suspect the OP hasn't calculated it. If they had, they would realise that they are still up despite the fund value being down and wouldn't have made this thread.

i.e.  Fund value down 20% in 3.5 years but annuity rates double what they were 3.5 years ago.  Net outcome is that they are better off and that the fund has done the job it was intended to do.

I agree. 

If the OP had put as much effort into understanding as they did complaining then they'd have saved themselves a lot of stress.

Of course, we're only getting snippets here but it's slightly dissappointing that the pension provider didn't provide an explanation in many weeks that this forum did in a few hours.

Marcon

leosayer said:

dunstonh said:

leosayer said:

Mr_Angry_from_Odiham said:

I should NOT have to do this and I am not a seasoned investor so there is some inherent risk.  But I believe I can do a better job of selecting more appropriate FUNDs to invest in than [Pension-Co] has demonstrated.  

Which funds would you have invested in?

Have you calculated your loss?

I suspect the OP hasn't calculated it. If they had, they would realise that they are still up despite the fund value being down and wouldn't have made this thread.

i.e.  Fund value down 20% in 3.5 years but annuity rates double what they were 3.5 years ago.  Net outcome is that they are better off and that the fund has done the job it was intended to do.

I agree. 

If the OP had put as much effort into understanding as they did complaining then they'd have saved themselves a lot of stress.

Of course, we're only getting snippets here but it's slightly dissappointing that the pension provider didn't provide an explanation in many weeks that this forum did in a few hours.

They may well have tried, but sometimes people just aren't in listening mode.

Hoenir

leosayer said:

dunstonh said:

leosayer said:

Mr_Angry_from_Odiham said:

I should NOT have to do this and I am not a seasoned investor so there is some inherent risk.  But I believe I can do a better job of selecting more appropriate FUNDs to invest in than [Pension-Co] has demonstrated.  

Which funds would you have invested in?

Have you calculated your loss?

I suspect the OP hasn't calculated it. If they had, they would realise that they are still up despite the fund value being down and wouldn't have made this thread.

i.e.  Fund value down 20% in 3.5 years but annuity rates double what they were 3.5 years ago.  Net outcome is that they are better off and that the fund has done the job it was intended to do.

Of course, we're only getting snippets here but it's slightly dissappointing that the pension provider didn't provide an explanation in many weeks that this forum did in a few hours.

Not the customer service agent's role to correct misconceptions or provide an informed market commentary.  Many people happily DIY investments to miminise costs. However fail to spend time educating themselves. Or seeking paid advice if they don't fully grasp complex topics upon initial reading. Very easy to be caught out by the unexpected. Investing is a roller coaster of a ride. 

penners324

Have you copy and pasted a scam letter from a claims company?

Marcon

OP - I've just read the Pension Investment Approaches guide written by your provider (it's online). It is beautifully clear and explains things straightforwardly and helpfully.

Have you read it? I think possibly not, so now might be a good time.

artyboy

Am I the only person wondering where "Odiham" is?

Marcon

artyboy said:

Am I the only person wondering where "Odiham" is?

Try google (spoiler alert: Hampshire. It's the main base RAF base for Chinook helicopters).

cfw1994

booneruk said:

This is too much to read if I'm honest.

If the nub of this is that a fund targeting an annuity purchase has been chosen then yes, it would have underperformed a lot of asset classes in recent years due to the interest rate shock. However - it will still generally purchase the same level of annuity as before.

I presume you were given the opportunity to research and select your own funds?

Are you actually worse off?

Indeed.
Quite a remarkable first post.  Can’t wait for the second instalment 👀
Kudos to those who have given useful replies 👍

Marcon

Mr_Angry_from_Odiham said:

Which begs the question – exactly what VALUE-ADD is [Pension-Co] bringing to the Pension management engagement, if I have to resort to exploring and selecting more suitable and safer investment FUNDs myself?   Surely, the whole point of using a Pension Plan rather than other investment options is because the Pension provider can be trusted to invest in a portfolio of Funds which will avoid losses and optimise Pension Pot growth.

Come on [Pension-Co] – please review your use of this FUND, and the FUNDs linked to Risk-v-Rewards / Outcome choices in general -  especially for Pension Holders hoping to have a reasonable Annuity in a few years’ time.  There are enough pitfalls and uncertainty with the markets and global economy, without renowned Pension Providers like you also letting us down or falling short when it comes to acting in your members’ interests.

...and all of it based on the hopelessly incorrect (and entirely understandable) premise that building up as much cash as possible is the objective, when OP has opted for an entirely different target: an annuity. As several people have explained with great care and clarity, the pension plan has been a resounding success in that respect. Quoting @dunstonh:

You have selected a fund that reduces in risk as you get closer to retirement with the intention of using 75% to buy an annuity.    The funds used for that have done just that.     The loss in value is irrelevant as the annuity rate does the opposite.  Think of it  as similar to 10 x 3 vs 3 x 10.

You just happened to have invested through the worst period for bonds in over 100 years.  However, you have been protected from that because annuity rates have gone up.    You will almost certainly find you are financially better off than you were three and half years ago.

OP, please read and digest these answers - and then leave poor old SW in peace. They have done an excellent job for you and Pension Protector has done its job perfectly. 

MeteredOut

cfw1994 said:

booneruk said:

This is too much to read if I'm honest.

If the nub of this is that a fund targeting an annuity purchase has been chosen then yes, it would have underperformed a lot of asset classes in recent years due to the interest rate shock. However - it will still generally purchase the same level of annuity as before.

I presume you were given the opportunity to research and select your own funds?

Are you actually worse off?

Indeed.
Quite a remarkable first post.  Can’t wait for the second instalment 👀
Kudos to those who have given useful replies 👍

Probably for the best. The norm for these sort of posts, where the majority did not agree with the vent, is typically silence.