Ark Life

[Citizen Jake]

Does anyone have any views on Ark Life at present. I've been saving into a pension fund for about 10 years now - by myself, haven't found an enlightened employer that contributes to funds save for a golden few select employees - and haven't seen it grow much. I know Ark Life are at the bottom of the league in terms of pension fund performance. I also am aware that they may be up for sale soon.

What I wish to know:

* How portable are pensions these days if I wish to move my savings to a better performing pension
* Could there be a possible gain for my fund if Ark Life is sold (in the form of shares).
* On my earlier point about employers topping up pensions, do you think the Government is likely to pass legislation requiring employers to top up pensions?

Any thoughts would be most welecom.

Jake

 

[montano]

Hi Jake

You haven't told us what type of pension you have, which is important for answering some of your questions. Given that your employer is not contributing and you've had it for about ten years, I'm going to assume it's a personal pension. If this is not the case, much of my answer will be inaccurate.

Portability: Personal pensions can be transferred to other companies; either to another personal pension or a PRSA. They cannot be transferred into a company sponsored occupational scheme.
Windfall gain: Almost certainly not. I don't believe that this possibility arises for any Ark Life policies, should any of the media speculation about a sale come to pass.
Compulsory pensions?: Your guess really is as good as anybody elses. It could easily go either way at this point in time. The statistics and the minister's view have been reported in the media. However, I would not suggest that anyone put off funding their own pension in the hope that the Government forces their employer to ride to their rescue in later years.

On transferring/poor fund performance: there is no denying that Ark Life has been at the bottom of the class when it comes to fund performance in recent years. However, we know that past performance is no guarantee of future returns, and that goes for bad performance as well as good. For example, New Ireland were at the top of the class for a few years, but BOI's recent woes with losing fund managers seems to have caused them to stumble in the last year.
Check your policy to see if there would be any penalty for transferring. Also check to see if you are due any bonus for your loyalty. Many pension policies have bonuses that kick in after 10 years. If you transfer out, you would lose your entitlement to any loyalty bonuses. You have to ask yourself if you think that any new fund manager will beat both Ark's fund performance and the bonus. Picking a new fund manager to do that is a lot to ask.

Montano

 

[ClubMan]

You haven't told us what type of pension you have, which is important for answering some of your questions.

...

Also check to see if you are due any bonus for your loyalty. Many pension policies have bonuses that kick in after 10 years.

This could be particularly relevant if the pension is invested in a with profits fund in which case early transfer could involve a MVA (Market Value Adjustment - fancy term for a chunk of it being taken in charges), the loss of terminal bonuses and the possible loss of windfall entitlements if applicable.