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  • FIRST POST
    • Lungboy
    • By Lungboy 9th Apr 18, 1:02 PM
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    Lungboy
    Sorting my wife's pensions
    • #1
    • 9th Apr 18, 1:02 PM
    Sorting my wife's pensions 9th Apr 18 at 1:02 PM
    My wife has recently changed jobs. She is now in the LGPS and has a small DC pension of just over 7k from her previous job. Clearly she can leave it where it is, but we want to make sure that's the best place for it, or if not, transfer it to either a PP or into her LGPS. It's currently with L&G invested in their Passive Lifestyle Strategy (https://www20.landg.com/DocumentLibraryWeb/Document?lgrouter=CommApp&targetApp=manageyouracco unt_documentlibrary_entry&reference=W12460_L3C3.pd f). Within this product the money seems to be split 75:25 between their Passive Global Equity (30:70) fund and their Passive Diversified fund. It's not immediately obvious what these are, but from digging around it seems they are https://www.trustnet.com/factsheets/p/n9z1/lg-global-equity-market-weights-3070-index-75-currency-hedged-pmc-pn-g25 and https://www.trustnet.com/factsheets/n/mz9j/blackrock-dc-aquila-life-market-advantage-hp-w respectively. Is that correct? If that is indeed the underlying funds, any comments? The 30:70 fund doesn't seem too bad, but the Blackrock fund looks a little lacklustre to say the least.
Page 1
    • Dox
    • By Dox 9th Apr 18, 1:13 PM
    • 511 Posts
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    Dox
    • #2
    • 9th Apr 18, 1:13 PM
    • #2
    • 9th Apr 18, 1:13 PM
    Depends how you define 'best'. The obvious answer is 'maximum value' but if she transfers to the LGPS, she will lose a lot of flexibility in terms of when and how she can take the benefits from her DC pension. On the other hand, depending on what the LGPS offers if she does transfer in, the financial outcome could be better. Certainly worth her while asking them - making decisions based on hard information is usually (but not always!) more straightforward.
    • Lungboy
    • By Lungboy 9th Apr 18, 1:17 PM
    • 1,365 Posts
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    Lungboy
    • #3
    • 9th Apr 18, 1:17 PM
    • #3
    • 9th Apr 18, 1:17 PM
    She's attending a pension seminar at work shortly so she's hopefully know more about the LGPS side of things then. Assuming (big assumption) a transfer in works the same way as a lump sum APC, 7k wouldn't buy her an awful lot extra, particularly compared to 35 years of compound growth in a DC pension.
    • Lungboy
    • By Lungboy 10th Apr 18, 8:51 PM
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    Lungboy
    • #4
    • 10th Apr 18, 8:51 PM
    • #4
    • 10th Apr 18, 8:51 PM
    Does nobody have any opinions on the underlying funds that her L&G DC pension is invested in?
    • ermine
    • By ermine 11th Apr 18, 11:37 AM
    • 661 Posts
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    ermine
    • #5
    • 11th Apr 18, 11:37 AM
    • #5
    • 11th Apr 18, 11:37 AM
    Does nobody have any opinions on the underlying funds that her L&G DC pension is invested in?
    Originally posted by Lungboy
    It's 7k. At the typical safe withdrawal rate of 5% that will give her 350 p.a in today's terms

    Don't sweat it But if you do want to:

    The second fund has a lot of fixed interest in it, if you are going to compare it with a currency hedged (why? You'll have lost a lot of the Brexit Boost to international holdings in 2016 due to the fall in the pound, though if you bought it since June 2016 because you think the fall was overdone and Brexit will be a success in the long run then fair enough) equity it will be lacklustre because the stock market has had a good run over the last few years. You hold such a mix because when the stock market has a hissy fit your fixed interest should hold up better.

    Fund fees are tolerable at ~0.4%, you need to ask whether you are paying platform fees on top of that. L&G aren't bad on fees for their passive products. You could look at Vanguard Lifestrategy 60% for a similar aim without the currency hedging but would need to hold it somewhere cheaper than HL who add a 0.45% platform fee to the 0.22% fund fee.

    How old is your wife - fees matter much more the longer she has to wait to get to 55? If your 35 years of compound growth implies she's 20 then she shouldn't have so much fixed interest, she shouldn't be currency hedging (because 30 years will average ups and downs) and you will want to flay fees mercilessly. Over three decades compounding at historical averaged stock market gains will hopefully double the real terms value of the amount so she may get 700 p.a (in today's terms) at a 5% SWR.
    Last edited by ermine; 11-04-2018 at 11:44 AM.
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