Do you have a pension?

suicide_circus · 25-08-2015 01:48PM

KomradeBishop wrote: »

Okey, well assuming it was a genuine question then, I'd simply save the money and put it into useful assets - and steer well clear of investments, unless I personally know exactly what I'm doing (and almost nobody has a clue what their pension fund is doing).

Don't believe the fantastical promises of huge returns. A lot of people get completely screwed over by pension funds, and the financial industry overall (the industry is based around dozens of different kinds of legalized fraud, aimed at screwing people over - making shítty investments to create high 'on-paper'/illusory profits that justify huge salaries/fees, high among them - so just stay away unless you know precisely what you're doing).

Limited return or even inflation-eroded savings, and more modest living in the present to save for that, are better than going into retirement, after watching a huge portion of your pension go up in smoke (which does happen to people...).

Thanks. I don't think my fund make any grandiose claims about mega returns as we're talking peanuts in my case. Any examples of "useful assets"?

Rackstar · 25-08-2015 01:49PM

jonny24ie wrote: »

Paying into my pension since I was 18

How is it doing?

mahoganygas · 25-08-2015 01:56PM

KomradeBishop wrote: »

In the real world, rather than this imaginary scenario, pension funds are invested in companies other than Microsoft (quaint that you believe all companies/investments are as secure as that...), and a lot of companies go bust during economic crises - leading to a complete wipeout of a part of investments.

This is unbelievable. You don't seem to understand efficient portfolio theory, diversification or the difference between unrealised and realised profit / loss.

Please tell me i'm being trolled?

KomradeBishop · 25-08-2015 01:58PM

suicide_circus wrote: »

Thanks. I don't think my fund make any grandiose claims about mega returns as we're talking peanuts in my case. Any examples of "useful assets"?

Such a fund is probably more realistic in its returns, but you don't know unless you examine things like what they are investing in, fees on the fund, and similar stuff - and a lot of that requires a bit of financial knowledge to really know whether it's secure or not (which not a lot of people have - I don't know much about that technical end of finances, or e.g. good investments, so no useful examples there - but I know a fair bit about fraud and the myriad of ways people can get ripped off; which is probably a good starting point for learning finances).

KomradeBishop · 25-08-2015 02:02PM

mahoganygas wrote: »

This is unbelievable. You don't seem to understand efficient portfolio theory, diversification or the difference between unrealised and realised profit / loss.

Please tell me i'm being trolled?

Do you have a clue what your pension fund is investing in? Or do you believe that the models/'theories' they use are flawless, and just trust them?

I know enough about portfolio theory, to know that it's mostly bollocks:
http://www.nakedcapitalism.com/2007/10/nicholas-taleb-attacks-pseudo-science.html

Most of economics and modern finance, is based on 'theories' which bear no resemblance to reality - but which are instead based on 'marketing' their theory/financial-product, to customers (usually with promises of safe/minimal-risk profits), regardless of the real-world results of those models/products.

Fizman · 25-08-2015 02:15PM

custard gannet wrote: »

I remember having a good old wonder at a girl in work some years ago in her mid twenties talking about setting up a pension. I don't know why you would bother. The living costs of a person in retirement age are a fraction of those of the rest of us.

They have either paid off their pension or, as often would be the case in the dublin a few decades from now, have paid rent all their working life and have their name down to downsize to elderly social housing.

Elderly people have less travel expenses. They no longer have to commute, a great deal of them give up driving, or at least regular driving, and they no longer have to pay for public transport. Also, they go on less holidays than younger working people, usually out of a lack of physical or mental fitness for it.

Elderly people drink less. Plenty of former big drinkers out there who would be pissed as a fart off five pints by the time they are in their seventies.

Elderly people have only themselves to look after, generally, no dependent children, no kids needing the occasional prop up for college and so on, it's a few treats for the grand kids every once in a while and nothing more.

Elderly people eat a little less than younger people, which cuts down on the food costs.

No rent, no transport costs, a higher likelihood of getting a medical card, limited drinking, in all honesty if you have no outstanding debts being old isn't the most expensive lifestyle in the world.

The issue I see here is, the state (in my opinion) are much less likely/equipped to be as generous in 20-30-40 + years time as they are today.

Lets not kid ourselves, there is no big pot of gold the government is milking today in order to pay the generous €218 weekly state pension amount, not to mention all the other freebies. The workforce today is paying for that in todays taxes.

I spoke with a CFA recently who said there is roughly 4:1 ratio of workers:retirees in Ireland today. In 30 years, that I believe is estimated to be closer to 2:1, so far less workers to generate high taxes for the ever increasing number of retirees (higher life expectancy etc etc).

kazamo · 25-08-2015 02:15PM

Ronnie Worried Workaholic wrote: »

Don't paint all DB schemes with the one brush. Ours was always proactive and identified issues well in advance of any regular involvement. We reviewed benefits, changed investment protocols, and increased contributions as needed. It is now absolutely solid and contribution rates were actually reduced back to the previous levels. We pick up the shortfalls when actuarial projections anticipate them, not "someone else". For the past 10 years investment return alone greatly exceeded pension payouts and the fund is currently sufficient to pay entitlements to all members on an assumed life expectancy in excess of 85. That said, the DB scheme is now closed to new members.

Regardless of a DB, DC pension or just investing for retirement generally, the last couple of days should have little impact long term.

Who picked up the shortfall.....employee....employer or customer via higher prices, or is it a combination of the three.
In a DC scheme, the employee picks up the tab.

The fact that your DB scheme is closed to new members says a lot.

Re last couple of days, the losses made have wiped out a large portion of any gain made year to date.
It will have little impact long term if the uncertainty doesn't continue.

ytpe2r5bxkn0c1 · 25-08-2015 02:21PM

kazamo wrote: »

Who picked up the shortfall.....employee....employer or customer via higher prices, or is it a combination of the three.
In a DC scheme, the employee picks up the tab.

The fact that your DB scheme is closed to new members says a lot.

Re last couple of days, the losses made have wiped out a large portion of any gain made year to date.
It will have little impact long term if the uncertainty doesn't continue.

Sorry, I should have been more clear. "We" are the members. Never a great concern as it was always fairly sound and we kept ahead of problems pretty well.

Playboy · 25-08-2015 02:22PM

KomradeBishop wrote: »

In the real world, rather than this imaginary scenario, pension funds are invested in companies other than Microsoft (quaint that you believe all companies/investments are as secure as that...), and a lot of companies go bust during economic crises - leading to a complete wipeout of a part of investments.

When you join a pension fund you can generally dictate the level of risk. Younger people will go for a higher risk strategy in the hope of obtaining higher rewards and as people age then the risk profile will reduce as you want a close to guaranteed pot of money to start drawing down from.

Also investing in the stock market is a long game. Stock has an upward trajectory, yes there are crisis where the value of shares will reduce for a period of time but overall the value should increase over decades.

Playboy · 25-08-2015 02:27PM

Fizman wrote: »

I spoke with a CFA recently who said there is roughly 4:1 ratio of workers:retirees in Ireland today. In 30 years, that I believe is estimated to be closer to 2:1, so far less workers to generate high taxes for the ever increasing number of retirees (higher life expectancy etc etc).

Which is exactly why many western countries are totally dependent on immigration. Immigrants bolster the tax paying population and generally have more children.

KomradeBishop · 25-08-2015 02:28PM

Playboy wrote: »

When you join a pension fund you can generally dictate the level of risk. Younger people will go for a higher risk strategy in the hope of obtaining higher rewards and as people age then the risk profile will reduce as you want a close to guaranteed pot of money to start drawing down from.

Also investing in the stock market is a long game. Stock has an upward trajectory, yes there are crisis where the value of shares will reduce for a period of time but overall the value should increase over decades.

Who has the financial knowledge to be informed enough, for actually knowing what the level of risk is? (including e.g. knowing that the stated level of risk is a lie) Almost nobody.
Do you know the specific investments your pension fund makes? Do you know the fees they charge? Almost nobody who has a pension, knows any of this.

The entire point of people selling high-risk pensions, is to sell them as minimal risk pensions - duping/fooling people into thinking it's safe - and very few people have the financial knowledge to tell a safe investment strategy, from a 'safe' i.e. highly risky one (and the financial industry is built around being able to hide the real amount of risk).

"In the long run" is not an argument. If you believe someone who tells you that things will be fine "in the long run", they are probably trying to fool/dupe you.

Many companies/investments go bust in a downturn, they don't just 'temporarily' lose some value - the stock market isn't some magical entity where nobody ever loses any money, so long as they wait for "the long run".

mahoganygas · 25-08-2015 02:33PM

KomradeBishop wrote: »

Do you have a clue what your pension fund is investing in?

50% US equities. 25% European/Asian equities. 15% bonds. The rest is cash.

KomradeBishop wrote: »

Most of economics and modern finance, is based on 'theories' which bear no resemblance to reality

Efficient portfolio theory suggests that a hypothetical portfolio of well diversified stocks will perform in the long term.

In reality index trackers have performed well in the long term.

AlexisM · 25-08-2015 02:38PM

KomradeBishop wrote: »

Do you know the specific investments your pension fund makes? Do you know the fees they charge? Almost nobody who has a pension, knows any of this.

I'm not a big fan of pensions and haven't put another cent in since the government made their asset grab but unless you think (as you may do...) that the pension companies out and out lie to customers and in their publications, this information is generally easy to come by.

I have a defined contribution scheme and I can go to the company (Zurich) website and for each chosen fund, I can see exactly which stocks are in each fund. For example, their 5*5 Global fund has about 50 equities all of which are listed along with the % of fund in each stock. See factsheet here: https://www.zurichlife.ie/static/documents/SI_5STAR5_FF/5_Star_5_Global_Fund_Factsheet.PDF?docTag=

NewCorkLad · 25-08-2015 02:45PM

KomradeBishop wrote: »

Who has the financial knowledge to be informed enough, for actually knowing what the level of risk is? (including e.g. knowing that the stated level of risk is a lie) Almost nobody.
Do you know the specific investments your pension fund makes? Do you know the fees they charge? Almost nobody who has a pension, knows any of this.

The entire point of people selling high-risk pensions, is to sell them as minimal risk pensions - duping/fooling people into thinking it's safe - and very few people have the financial knowledge to tell a safe investment strategy, from a 'safe' i.e. highly risky one (and the financial industry is built around being able to hide the real amount of risk).

"In the long run" is not an argument. If you believe someone who tells you that things will be fine "in the long run", they are probably trying to fool/dupe you.

Many companies/investments go bust in a downturn, they don't just 'temporarily' lose some value - the stock market isn't some magical entity where nobody ever loses any money, so long as they wait for "the long run".

Sorry but you are talking through your ass. Must pension providers are now clearly grading their investment funds on the ESME scale which is an internationally recognised standard for grading risk. 1 being low risk and 7 being high risk, simple enough for anyone to undertand. Surprisingly enough, for an industry trying to hide the risk of funds, must investment funds fall into 5-7 range, with plenty of choice there for people with any appetite for risk.

KomradeBishop · 25-08-2015 02:58PM

mahoganygas wrote: »

50% US equities. 25% European/Asian equities. 15% bonds. The rest is cash.

So in other words, no - you have no idea what your pension fund is investing in, other than a certain portion of it being equities and bonds - and you have absolutely no idea what those specific equity investments are.

The Private Equity industry is also rife with fraud, and has a long history of illusory 'profits', that get blown up - that's one of the riskier classes of investment - are you aware of that? What's so special about your pension fund, that makes it immune to all this?

mahoganygas wrote: »

Efficient portfolio theory suggests that a hypothetical portfolio of well diversified stocks will perform in the long term.

In reality index trackers have performed well in the long term.

Portfolio theory is marketing, it bears no resemblance to the real world, where unexpected events happen to wipe out large amounts of value from individual investments - without that being restored in the next market 'upswing'.

Really, start googling 'portfolio theory criticism' and the like - it is total nonsense.

In reality, it doesn't matter if index trackers perform well, if you don't keep an eye on precisely what your pension fund is doing, including e.g. the fees they are charging - which can cut significantly into the money that ends up in the final pension pot.

There's a whole lot of rent-seeking that goes on in the pension fund industry, and what happens in the US (i.e. the latest innovations in fraud), generally get exported to Ireland/UK and other worldwide financial markets fairly quickly:
http://www.nakedcapitalism.com/2014/08/hedge-fund-private-equity-fund-rent-seeking-high-fees-crappy-performance.html

KomradeBishop · 25-08-2015 03:18PM

AlexisM wrote: »

I'm not a big fan of pensions and haven't put another cent in since the government made their asset grab but unless you think (as you may do...) that the pension companies out and out lie to customers and in their publications, this information is generally easy to come by.

I have a defined contribution scheme and I can go to the company (Zurich) website and for each chosen fund, I can see exactly which stocks are in each fund. For example, their 5*5 Global fund has about 50 equities all of which are listed along with the % of fund in each stock. See factsheet here: https://www.zurichlife.ie/static/documents/SI_5STAR5_FF/5_Star_5_Global_Fund_Factsheet.PDF?docTag=

My point was, does anyone ever look at this information? Largely, people haven't a clue.

Are you aware of the extremely concerning practices of the Zurich insurance group? Where they have been receiving massive fines for their practices, and those practices involved inflating commissions/fees?
https://en.wikipedia.org/wiki/Zurich_Insurance_Group#Criticism

You're also investing in this company:

Bayer became part of IG Farben, a German chemical company conglomerate, in 1925...

During World War II, IG Farben used slave labor in factories attached to large slave labor camps, notably I.G. Auschwitz,[21] and the sub-camps of the Mauthausen-Gusen concentration camp.[22] IG Farben engaged in human experimentation on Auschwitz prisoners, often with fatal results.[23] After World War II, the Allies broke up IG Farben and Bayer reappeared as an individual business. IG Farben board member Fritz ter Meer, sentenced to seven years in prison during the IG Farben Military Tribunal at Nuremberg, was elected Bayer's supervisory board head in 1956.[24]

A bunch of the financial companies that make up a part of that funds investments, are also heavily engaged in various types of arguably fraudulent and massive rent-seeking activities; not a very ethical set of investments.

mahoganygas · 25-08-2015 03:21PM

With respect, you really don't understand these things in sufficient detail to make these wide sweeping comments. Do you work in the industry?

KomradeBishop wrote: »

So in other words, no - you have no idea what your pension fund is investing in, other than a certain portion of it being equities and bonds - and you have absolutely no idea what those specific equity investments are.

You're missing the point. At any time I can view what makes up the portfolio in intimate detail. Fund managers trade daily. By it's nature, a fund is a moving target. I gave you a very rough estimate for simplicity.

KomradeBishop wrote: »

The Private Equity industry is also rife with fraud, and has a long history of illusory 'profits', that get blown up - that's one of the riskier classes of investment - are you aware of that? What's so special about your pension fund, that makes it immune to all this?

My pension fund doesn't invest in private equity. It also doesn't invest in CFD's or credit default swaps - i'm sure you will find these even more controversial!

My point is that I have control over where my pension is invested. Everybody has this choice.

I think we both agree that people should make themselves more informed on financial investments. But I don't for one second agree that pension funds or capital markets can be dismissed as corrupt or some sort of evil industry as suggest.

KomradeBishop · 25-08-2015 03:24PM

NewCorkLad wrote: »

Sorry but you are talking through your ass. Must pension providers are now clearly grading their investment funds on the ESME scale which is an internationally recognised standard for grading risk. 1 being low risk and 7 being high risk, simple enough for anyone to undertand. Surprisingly enough, for an industry trying to hide the risk of funds, must investment funds fall into 5-7 range, with plenty of choice there for people with any appetite for risk.

Oh please :rolleyes: You actually think any 'internationally recognized standard' for 'grading risk' is worth its weight in fecal matter? After all the events of the last decade have rendered pretty much all risk-weighting models as worthless?

The financial industry is built around falsified risk calculations - that's a large part of how the entire financial crisis happened.

After all of the past precedent of falsified risk statistics, it's just plain naive to believe that any 'risk weighting' scale in use is anything other than utter nonsense.

KomradeBishop · 25-08-2015 03:31PM

mahoganygas wrote: »

With respect, you really don't understand these things in sufficient detail to make these wide sweeping comments. Do you work in the industry?

I understand fraud and ripping people off, and the flaws with the financial/economic industries models, better than anyone on the thread - likely better than anyone on the whole forum, as I've spent years reading up on this stuff, and know plenty of reliable sources for researching this.

So you can forget trying to pull the "I work in the industry, therefore I have an 'intellectual/professional authority' trump card" nonsense.

mahoganygas wrote: »

You're missing the point. At any time I can view what makes up the portfolio in intimate detail. Fund managers trade daily. By it's nature, a fund is a moving target. I gave you a very rough estimate for simplicity.

Do most people with a pension actually do that, or do they remain ignorant of that? Largely the latter.

mahoganygas wrote: »

My pension fund doesn't invest in private equity. It also doesn't invest in CFD's or credit default swaps - i'm sure you will find these even more controversial!

My point is that I have control over where my pension is invested. Everybody has this choice.

I think we both agree that people should make themselves more informed on financial investments. But I don't for one second agree that pension funds or capital markets can be dismissed as corrupt or some sort of evil industry as suggest.

Everyone has a choice, but very few people have the knowledge - which is my point.

I actually disagree that people should rely on being better informed about finances, because it's something people should not be getting into, unless they are an expert - as otherwise they carry a significant risk of being screwed over.

Last sentence there is a straw-man.

mahoganygas · 25-08-2015 03:34PM

KomradeBishop wrote: »

I understand fraud and ripping people off, and the flaws with the financial/economic industries models, better than anyone on the thread - likely better than anyone on the whole forum, as I've spent years reading up on this stuff, and know plenty of reliable sources for researching this.
.

On that note, i'm bowing out.

All the best.

AlexisM · 25-08-2015 03:38PM

KomradeBishop wrote: »

Are you aware of the extremely concerning practices of the Zurich insurance group? ...

You're also investing in ...
... used slave labor ...Nuremberg, was elected Bayer's supervisory board head in 1956...
... also heavily engaged in various types of arguably fraudulent and massive rent-seeking activities;
not a very ethical set of investments.

Ethical investing is a different issue though...

[And seriously? I'm investing in the Nazi's...?]

KomradeBishop · 25-08-2015 03:41PM

AlexisM wrote: »

Ethical investing is a different issue though...

[And seriously? I'm investing in the Nazi's...?]

It isn't really, as it says a lot about the character of the people doing the investing, and whether there is reason to be concerned about how they might manage your investment.

You aren't concerned about the history of the companies you invest in?

ThinkProgress · 25-08-2015 03:47PM

One More Toy wrote: »

Was sitting around at work talking about it, I was the only one of my colleagues to have one set up, and contributing the maximum, why is there such disregard in the Irish population towards private pensions? The state one wont provide the greatest of living standards yet people put it off, even into their forties:eek:

Retirement age is going up frequently, and people are living longer healthier lives...

Depending on how labor intensive your chosen profession is, full retirement is not really something you have to worry about until your 70's.

Ireland is full of workaholics too (in my experience), so many people enjoy working - even if they b!tch about it constantly.

ytpe2r5bxkn0c1 · 25-08-2015 03:56PM

KomradeBishop wrote: »

Everyone has a choice, but very few people have the knowledge - which is my point.

I think, honestly, the point is that you do not have the knowledge. You have no idea what you are talking about. You are obsessed with fraud. My pension pays me very very well thanks to me and the fund trustees actually knowing what is what.

And having read your other comments, I'm out because there's just no point any more.

draiochtanois · 25-08-2015 04:06PM

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draiochtanois · 25-08-2015 04:10PM

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KomradeBishop · 25-08-2015 04:20PM

Ronnie Worried Workaholic wrote: »

I think, honestly, the point is that you do not have the knowledge. You have no idea what you are talking about. You are obsessed with fraud. My pension pays me very very well thanks to me and the fund trustees actually knowing what is what.

And having read your other comments, I'm out because there's just no point any more.

You don't have an authority on knowledge on this topic Ronnie Worried Workaholic - what do you know, exactly? I know a ton about fraud all throughout the financial profession, so yes, that would put me pretty high in terms of knowledge in this topic.

I don't try to lord that over other posters, as a trump card though - as you and others are trying to do, in an extremely arrogant way - I make arguments to back my points, I don't reach for the 'intellectual authority' card.

"You don't know what you're talking about" "Pff, no point replying to you anymore" - i.e. the usual nonsense people spout, when they've lost the ability to form a counterargument.

KomradeBishop · 25-08-2015 04:22PM

draiochtanois wrote: »

This post has been deleted.

Godwins law is about analogies - this is about actual investment within a company, that was involved with the Nazi's.

Do you see any moral problem in investing in a company, with the below history, as posters are doing?

Bayer became part of IG Farben, a German chemical company conglomerate, in 1925...

During World War II, IG Farben used slave labor in factories attached to large slave labor camps, notably I.G. Auschwitz,[21] and the sub-camps of the Mauthausen-Gusen concentration camp.[22] IG Farben engaged in human experimentation on Auschwitz prisoners, often with fatal results.[23] After World War II, the Allies broke up IG Farben and Bayer reappeared as an individual business. IG Farben board member Fritz ter Meer, sentenced to seven years in prison during the IG Farben Military Tribunal at Nuremberg, was elected Bayer's supervisory board head in 1956.[24]

draiochtanois · 25-08-2015 04:28PM

This post has been deleted.

NewCorkLad · 25-08-2015 04:32PM

KomradeBishop wrote: »

I don't try to lord that over other posters, as a trump card though - as you and others are trying to do, in an extremely arrogant way - I make arguments to back my points, I don't reach for the 'intellectual authority' card.

KomradeBishop wrote: »

I understand fraud and ripping people off, and the flaws with the financial/economic industries models, better than anyone on the thread - likely better than anyone on the whole forum, as I've spent years reading up on this stuff, and know plenty of reliable sources for researching this.

Right:rolleyes:

Do you have a pension?

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