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Why are people obsessed with getting a pension

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    #1502
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,000 Mod ✭✭✭✭Jim2007


    hmmm wrote: »
    How does the asset manager make money, and how do they possibly guarantee a return?

    They charge a fee in the normal way...
    McGaggs wrote: »
    Usually guaranteeing a return on a fund will have a drag on the performance as it will have a larger allocation to fixed interest assets

    As I pointed out, the asset allocation and instrument selection is regulated, so no investment portfolios cannot be loaded up with FI type instruments.

    The minimum return rate is set by the government and is not a simple AUM calculation, it assumes a certain capital loss in recessionary times but is intended to ensure previous gains are not wiped out.

    I’m no longer saving for a pension and am out of the industry as well, so I don’t get the reports anymore. At the height of the last recession my pension had an annualized return of 7.3% and min return was 3.5%.


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    #1503
    hmmm
    Registered Users Posts: 11,205 ✭✭✭✭hmmm


    Jim2007 wrote: »
    They charge a fee in the normal way...
    I thought you said they didn't charge a fee? What sort of % is being charged?
    As I pointed out, the asset allocation and instrument selection is regulated, so no investment portfolios cannot be loaded up with FI type instruments.

    The minimum return rate is set by the government and is not a simple AUM calculation, it assumes a certain capital loss in recessionary times but is intended to ensure previous gains are not wiped out.
    I'm lost as to how they can guarantee a return in those circumstances. Unless the return is dramatically less than an employee might expect to receive in a self-managed fund with the same asset allocation.


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    #1504
    The J Stands for Jay
    Registered Users Posts: 5,650 ✭✭✭The J Stands for Jay


    hmmm wrote: »
    I thought you said they didn't charge a fee? What sort of % is being charged?

    I'm lost as to how they can guarantee a return in those circumstances. Unless the return is dramatically less than an employee might expect to receive in a self-managed fund with the same asset allocation.

    From what I can gather, the current guaranteed amount of 1%, with the government going against their own experts who advised 0.75%.


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    #1505
    Simon201
    Registered Users Posts: 851 ✭✭✭Simon201


    Anyone received a pension statement lately? I know it says it is only a prediction but my Irish Life work monthly pension prediction (4 years time) is now only two thirds of what was predicted in 2018! I suppose they're blaming this on Covid etc. For the last 10 years or so it's only increased by varying amounts...


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    #1506
    howamidifferent
    Registered Users Posts: 1,817 ✭✭✭howamidifferent


    Simon201 wrote: »
    Anyone received a pension statement lately? I know it says it is only a prediction but my Irish Life work monthly pension prediction (4 years time) is now only two thirds of what was predicted in 2018! I suppose they're blaming this on Covid etc. For the last 10 years or so it's only increased by varying amounts...

    Care to share what its invested in as in bonds or equities, low or high risk etc?


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    #1507
    Shedite27
    Registered Users Posts: 9,364 ✭✭✭Shedite27


    Simon201 wrote: »
    Anyone received a pension statement lately? I know it says it is only a prediction but my Irish Life work monthly pension prediction (4 years time) is now only two thirds of what was predicted in 2018! I suppose they're blaming this on Covid etc. For the last 10 years or so it's only increased by varying amounts...
    Yes noticed my IL prediction has changed, they must have changed some of their projections. The bold sttement at the bottom (under "Important") states what they're basing the expected outcome on. I can see in my latest 2 statements it's changed from "projection 4.45% return" to "projection 5% return"


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    #1508
    The J Stands for Jay
    Registered Users Posts: 5,650 ✭✭✭The J Stands for Jay


    Shedite27 wrote: »
    Yes noticed my IL prediction has changed, they must have changed some of their projections. The bold sttement at the bottom (under "Important") states what they're basing the expected outcome on. I can see in my latest 2 statements it's changed from "projection 4.45% return" to "projection 5% return"

    So it's either:
    - Society of Actuaries have changed their guidance notes and reduced the anticipated return rates.
    - The composition of the fund has changed
    - you've changed funds.


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