Aviva previously Friends First pensions

boru1960

Giving a heads up to anybody with a pension with Aviva or choosing a pension provider, beware.

I took out 2 pensions in my 30's one with Friends Provident the other Zurich. The Friends policy showed a retirement date of 70 years which back then, even now, was unheard of. Even today there are many people employed who face compulsory retirement at age 65. The agent said don't worry about it the retirement date is flexible.

Now these 2 pensions with similar contributions in similar funds performed pretty much equally until four or five years ago when Friends now Aviva fell behind by a large amount. In fact published pension funds performances show Aviva is second last for years.

To add insult to injury as a self employed person I did not have a fixed retirement date I made the decision in Oct '21 to cash in my pensions, my age then 69yrs 3mths. The value of the Aviva pension was over €20,000 less than Zurich which is unfortunate but accepted.

However to add insult to injury Aviva deducted €4,500 (3 years previously it was €1,000!) claiming it as an AMV which is a penalty for early encashment to protect other investors. I complained pointing out what my broker had advised me and their policy clearly states that after age 60 the policyholder can change the retirement date at any time.

If you have a pension with Aviva check it out, if you are looking for a pension scheme I recommend you steer well clear of Aviva not only is their investment performance dreadful they will penalise you if you cash in before their outrageous maturity date of 70 years

To the organisation who compiles and publishes Irish pension fund performances i suggest you investigate whether you should further downgrade Aviva's pension funds percentage performance if they are penalising people like me who are entirely reasonably retiring at an age well past 65 let alone age 60!

The J Stands for Jay

It was extremely common back in the day to write with profits pensions to the maximum age of 70 (now 75) in order for the brokers to get maximum commission (it was based on term to retirement).

Henry Ford III

Closing this for review.

Henry Ford III

Reopening this.

I have some issues with your original post OP. I think you are incorrect on a few points, and don't understand others.

1/. Normal Retirement Date. Currently can be from 60 - 75. So a retirement date of 70 isn't "unheard of".

2/. Retirement dates are indeed flexible. It can be changed easily. Did you change the NRD before taking retirement benefits? If not why not?

3/. I've never heard of an "AMV". I'm familiar with MVA's though. The apply to "with profit" policies only. Zurich have never offered these, but FF and Aviva did. They are totally different to unit linked funds, and values are expressed differently. Unit linked funds can go up and down in value, whereas with profit policies will increase in value if bonuses are added. Once added these cannot be removed. The entire policy is subject to review however if benefits are taken on any date before the NRD. An MVA can be applied in those circumstances.

4/. Fiends First (now Aviva) are a very large and reputable company. They don't rob peoples money as you are suggesting. They can and do apply policy conditions however.

I suspect that your bad experience has more to do with poor advice than anything else. Whilst you can't turn the clock back now my view is that the MVA could easily have been avoided and that your advisor either didn't understand with profit funds, or didn't explain them to you sufficiently.

delboythedub

https://www.boards.ie/discussion/2058257586/aviva-previously-friends-first-pensions

You need to be very proactive with you pension and check every month online that its not losing your money. also what % is in high risk stuff. wish i knew about the above years ago

coylemj

https://www.boards.ie/discussion/comment/119453635#Comment_119453635

Checking a pension fund every month is not a good idea. It means that you will almost certainly lose money by constantly being in reactive mode i.e. you will move to conservative funds in a panic when there's a dip in equities and then you'll miss the recovery. Pension funds are not for day traders.

Henry Ford III

https://www.boards.ie/discussion/comment/119454455#Comment_119454455

I agree. Annual reviews are generally fine.

Jim2007

https://www.boards.ie/discussion/comment/119453635#Comment_119453635

Most definitely not, that is a receipt for loose money. Pension fund products are heavily regulated and managed by professionals with no personal interest in the fund and investment decisions are made with a long term perspective not a month on month KPI, so the chances of you being able to do a better job is most unlikely.

Your mistake most likely will have been to include an inappropriate product in your selection and that is something that can be corrected by an annual review and an understanding of the pension strategy. If you are chopping and changing on a monthly bases over say a 30 year period then the chances of you coming out with more than what you put in are minimal.

Right now is an excellent time for pension funds to load up from the fire sale that has been going on, so make sure you understand the strategy of the products you are invested in.

delboythedub

https://www.boards.ie/discussion/comment/119454455#Comment_119454455

https://www.boards.ie/discussion/comment/119454455#Comment_119454455

Sir I lost €10000 in 12 months in my pension because i was not keepan eye on it. high risk stuff is normal at early stages of pension but not ok when you are in your 60's

i stand over what i said about keeking an eye on it.

Henry Ford III

https://www.boards.ie/discussion/comment/119470906#Comment_119470906

Higher risk funds nearing retirement is not a great strategy. Your adviser should have told you to reduce risk over a period of time.

coylemj

high risk stuff is normal at early stages of pension but not ok when you are in your 60's

Agree 100%. How did you let yourself get into that situation? Any adviser worth his/her salt would have told you to gradually move the money into lower risk funds as you neared retirement age. A lot of suppliers will do this automatically for you over the last 10 years up to your planned retiurement age - they will move 10% of your fund each year from high risk to low risk. It provides a buffer from market shocks so while it constrains your potential for growth in the later stages, it also insulates you from sudden dips in the markets.

Jim2007

https://www.boards.ie/discussion/comment/119470906#Comment_119470906

Then as I already pointed out:

Your mistake most likely will have been to include an inappropriate product in your selection and that is something that can be corrected by an annual review and an understanding of the pension strategy. 

If you are in your 60 and are investing in asset classes that expose you to such potential losses, then watching it will not protect you because the mentality that put you in that situation in the first place will almost certainly move to another high risk product blaming the product for the losses rather than their poor strategy.

After 30+ years, I've heard every story out there about why people lost money and short of an actual fraud, people generally lost money because they did not stick to the best practices recommended for managing their funds. And while they could have still lost money, the losses would not have been so great.