Looking at pension performance incorrectly?

S

Slippers

Registered User
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Approximately 6 months ago the company I work for changed their pension provider. At that time my total pension was transferred to the new pension provider. I continue to pay monthly into the new pension.

My pension payments are spread across 3 funds:

Fund 1 - 71% allocation. Up 10.45% over the last 6 months.
Fund 2 - 21% allocation. Up 12.48% over the last 6 months.
Fund 3 - 8% allocation. Up 2.44% over the last 6 months.

The performance of each fund over the last 6 months has been got directly from my pension provider.

Now what I don't understand is the difference between the fund performance listed above and the growth indicator value given on my pension dashboard. The growth value indicator is stating up 3%.

Right now, I am assuming that the growth value of 3% is also over approximately 6 months as that is how long ago I was transferred into the new pension. Based on fund performance over the last 6 months i would have expected better than 3%.

Am I looking at this incorrectly?
 
You don't any what each fund is invested in? Are they Managed Funds, Equity Funds, Cash Funds ?
The performance of each fund will depend of the assaet mix in each Fund. The two higher performance Funds look like Managed Funds or Equity Funds.
The 3% figure may just be an example performance, ie if the Funds performed at 3% pa ( conservative number) then the projected fund at retirement might be x or y or z.
 
Slippers said:
The growth value indicator is stating up 3%.
Click to expand...
You need to give more info about the context of this figure.
E.g. the text of the section in which it appears perhaps.
As @Conan says it could simply be an assumed return for the purposes of projections of what your pension might be worth in the future under assumed conditions which bear no relationship to actual returns or reality.
 
See screenshot below. The funds are equity based and not managed.

If you multiply the "my contributions" value by 3% you get approximately "my retirement account" value. The pension provider defines the growth indicator as:

"The Growth Indicator is calculated by comparing the value of assets in your retirement account versus the amount that you and your employer may have contributed into your retirement plan."




For reference here are the fund charts for the last 6 months

 
OK - the 3% looks like an assumed annual return for the purposes of future projections.
That being the case it's largely meaningless and nothing to do with actual returns.
 
I am not seeing how that may be an assumed annual return.

What makes you believe it is?
 
Ok, so your money is invested across 3 different Equity Funds. Each has (and will probably) deliver different returns over time.
I don't understand the significance of the 3% as illustrated. If the current value of the 3 Funds is€183,940, then I fail to see the purpose of the one 3% increase to €188,554, unless you were due to retire in say one year and this was intended to be a projected value at retirement. If that's not the case, I fail to the purpose of the 3%.
Perhaps you need to ask Mercer.
 
Slippers said:
I am not seeing how that may be an assumed annual return.

What makes you believe it is?
Click to expand...
The fact that it's titled "growth indicator" and not "return" or similar.
But you'll probably need to ask the pension provider/intermediary to be sure.
 
I reckon they are attempting to illustrate your investment performance to the closest whole number e.g 1 - (183490 / 188554) = 2.69%. That wouldn’t look great on screen so it probably just rounds to the nearest whole number.

So just a quick ready reckoner as to how much your contributions have grown by?
 
I don't think we can be sure exactly what the 3% is (and your actual question: the apparent disparity between this 3% and the underlying fund performance) without more information - it'd be clearer a year from now.

Although, total on right is actual value today @Conan.

Totals on left are value of contributions at time of investment via Mercer (i.e. about 6 months ago for the majority of the OP's fund).
 
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So to restate what I think is your actual question @Slippers : if over 80% of my investment is in funds which returned over 10% in last 6 months, why isn't the growth figure closer to 10% than 3%?

Ignore the fund split for future contributions (which is in any case "managed for you"). How was your transfer value split across funds when invested 6 months ago?

I'm going to hazard a guess that it was (and still is) 100% in the fund which grew 2.44% over the last 6 months? Which would explain why the growth figure (and indeed the actual difference between left and right totals) is not closer to some weighted average of the individual fund returns.
 
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Mercer do have copious online help

Mercer Ireland | Linktree

Get the most from your pension plan website: Mercer OneView
linktr.ee

Based on a quick skim of these materials, I'm going to guess that the Growth Indicator is aiming to show your actual lifetime growth, rounded to the nearest percentage, per @Smoneen .

In the case of this example image, €44551-€26740 = €17811, which is 39.98% of €44551.


It's a pretty meaningless figure really, since it ignores that contributions were made at different times. Also, it's calculated as a percentage of the present value. So if you had invested €26740 as a lump sum, 40% growth would not be sufficient to achieve that performance.


Aside: a trick with Mercer OneView is that you can skip step 1 of the login by including your Employer Code in the URL and bookmarking that:
https://www.merceroneview.ie/Welcome/Login.aspx?YOURCOMPANY
(there's a minor security issue here actually in that this form treats valid and invalid employer codes differently. This could be abused to brute force a list of employers using Mercer, which could then be combined with employee details from LinkedIn to run some convincing scams).
 
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Wow!
 
I think you're looking back exactly six months in the graph to the 27 Dec - but that's unlikely to be the date the pension company used to move your money to new funds.

When I've transferred money between pension funds - the transfer takes a few days before it shows up and then it can be a few days before it goes from cash to preselected funds. They'll tell you before it happens it'll be smooth and you won't be out of the market - but in my experience that's not the case - it took just under two weeks in a transfer I was doing.

The funds involved seem a bit more volatile than most regular pension funds, if you check the graph while your main fund is up 10% between 27 Dec and 27 June, it's only up about 5% since 27 Jan.

Also it's possible that graph doesn't include fund charges - but that's probably only a minor part of the problem here since it's a relatively short period of time.
 
Having stalked the OPs profile, I know he transferred from Irish Life to Mercer.

My own company did the same a few months ago (pesky Master Trust legislation prompting everyone to reevaluate.). I was surprised to see that the sale of Irish Life units and purchase of Mercer units was recorded as happening on the same day.

Although granted the OPs experience may have been different, particularly over the Christmas period.
 
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So I got a reply back from my new pension provider. Mistake on my side .

Funds were actually transferred on later date than what I recalled. I should have looked at my contribution dates more closely in my portal.

With that realisation I did quick back of the napkin calculations, and I am getting approximately what is being reported on my pension dashboard. Will go through calculations again in a few months for my own sanity.
 
@Slippers

But the money that was disinvested by the original provider and transferred to the new provider (takes a few days) was invested by the new provider from the date it was received by them, yes?

Gerard

www.prsa.ie
 
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