Phoenix Life Pension performance? Poor?

Steppy

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Hi All,

I recently found details of an old personal pension I took out with Cornhill many years ago, which I stopped paying into when I joined a company pension in 1998. My Cornhill pension was sold on to Phoenix Life. I checked my old paperwork and found the fund hasn't grown by very much over the years. Is this a Phoenix Life poorly performing fund problem or a pension market issue? I was thinking of transferring the pension out to help stop it losing more money.

Fund value on Sept-00 was £2363 and todays value is £2732. A growth of only £369!

I know it's only a small value fund, but there's no point throwing away good money. Any ideas how to protect whats left? My company pension scheme has an AVC system. What should I watch out for if I transfer my old PP to a AVC? I'm getting some details of the company AVC costs.. in the post...

Cheers,

Steppy

dunstonh

Is this a Phoenix Life poorly performing fund problem or a pension market issue

Phoenix are a provider and offer hundreds of investment funds. All inherited through purchases. Some of their plans have unit linked funds available and some are doing rubbish. Some are doing well. Many of their plans have guaranteed annuity rates.

I was thinking of transferring the pension out to help stop it losing more money.

Your figures show it is not losing money. It grew by 15% in the period you mentioned. Given the timescale that could be a 100% FTSE tracker or similar. You need to give us more info on the fund.

What should I watch out for if I transfer my old PP to a AVC?

Are there guarantees on the old pension?
Are there protected rights?
what other investment options are available
AVCs are largely obsolete unless they get an enhancement from the employer or can be used to enhance the main scheme. Does yours?
Charges need to be considered, including transfer penalties.

cooper2110

Something also to bear in mind, is that with such a small fund (and it appears you are no longer paying into it), how much do you stand to gain by transferring, especially if there are any charges on the proposed new contract? The level of income on a 2k fund is tiny anyway.

Steppy

Hiya,

Thank you Dunstonh & Cooper2110 for the suggestions and pointers.. I can see a bit of light now!

I phoned Phoenix Life’s customer help line… It was like trying to walk through treacle!

Anyway, it seems my pension fund has:

• No guarantees.
• No protected rights.
• Invested 100% into Phoenix’s BULA (ACI) Managed Pension fund.
• I can make one free fund switch each year.
• A £25 fee for each funds switch thereafter within the year.
• The transfer value is 100% with no penalties or fees.
• Management fees are changed daily 1/365. I was told it’s the equivalent of 1.25% per year.

My money is invested 100% into Phoenix’s BULA (ACI) Managed Pension fund. There are five funds which I can invest in or can transfer to.. Information on the funds can be found on phoenixlifegroup.co.uk under Ex Allianz Cornhill pension funds. I’ve downloaded the pdf files to read later on..

Phoenix’s 5 Funds (Ex Allianz Cornhill Pension funds):

• Phoenix BULA (ACI) Managed Pension – SEDOL code 224587.
• Phoenix BULA (ACI) Equity Pension – SEDOL code 224576.
• Phoenix BULA (ACI) Fixed Interest Pension – SEDOL code 224565.
• Phoenix BULA (ACI) Money Pension – SEDOL code 224587.
• Phoenix BULA (ACI) Property Pension – SEDOL code 224598.

My thoughts are:

• Choose the less risky fund until the stock market picks up again.
• Switch the fund to a better performing fund within the 5 Phoenix funds.
• Gather more information on my works AVC proposed new contract costs.

Phoenix Life is sending information in the post, but it’ll take about 15 days for them to gather the information before sending it out.

Any thoughts in the meantime?

Cheers,

Steppy

dunstonh

The transfer value is 100% with no penalties or fees.

Thats good. You have freedom to move at no cost.

Management fees are changed daily 1/365. I was told it’s the equivalent of 1.25% per year.

A stakeholder pension with a better fund range would be 1% or less.

Invested 100% into Phoenix’s BULA (ACI) Managed Pension fund.

I often refer to balanced managed funds as Jack or all trades, master of none. There are exceptions but they are lazy investment funds for lazy investors. You are never going to get decent performance out of it but you wont suffer the same levels of volatility that say a UK Growth or FTSE tracker fund would have. Balanced managed funds are very often the default fund to be in. They are not bad. Just nothing special.

My thoughts are:

• Choice the less risky fund until the stock market picks up again.
• Switch the fund to a better performing fund within the 5 Phoenix funds.
• Gather more information on my works AVC proposed new contract costs.

comments on that would be
1) if you wait until markets recover, then you miss out on the growth and go back in when the markets are higher and just about ready for another drop.
2) with no transfer penalty and lower charges and more funds on modern contracts, it seems there is no reason to stay put. Then only thing you would need to 100% verify is if there are any guaranteed annuity rates.
3)AVCs are largely obsolete. You would need to see if the AVC can enhance the benefits of the main sceheme with regards to lump sum. If not, then the AVC may be too restrictive and really offer no benefits over the current pension meaning a stakeholder or personal pension is better. AVCs are on their way out.

Steppy

Hi,

"if you wait until markets recover, then you miss out on the growth and go back in when the markets are higher and just about ready for another drop."

I took a quick look the 5 & 10 year return on the other four Phoenix funds pdf information and the growth for these funds were more or less the same. With only Property and Equity funds just beating the Managed Fund.

Q - Is Property & Equity at the top?

I would have thought the Money and Fixed Interest funds would be in favour by now... due to the credit issues we are now seeing..?

My thoughts are:

1. Switch to the Money or the Fixed Interest fund for a 1 year. Then switch back into another fund within the 5 funds.

How do people feel about Money and Fixed Interest funds? On the up / safe just for now or the next year or so..?

Cheers,

Steppy