Pension fund choice

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nest egg

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My wife's employer is moving their pension scheme to Zurich. Her current fund is small (40k) and she is 40 this year.

She plans to aggressively invest in her pension from now on (25% gross earnings), and needs to make a decision on what fund to choose with Zurich. She doesn't need to be conservative anytime soon so the thinking is a passive global equity fund is the way to go.

Based on the options provided, looks like the choice is the "Indexed Global Equity (BlackRock)"

Is this the prudent choice?

Investment Bond Individual Fund Specific Information

www.zurich.ie www.zurich.ie
 
mojoask said:
All other things being equal, the fund she has in mind looks competitive.
https://www.zurichlife.ie/DocArchiv...15501.232469495.1651233393-3489990.1648825174

"If the costs shown are added to the annual management charge stated on your policy certificate, the resulting figure is comparable to a Total Expense Rates (TER) or to an Ongoing Charges figure (OCF) used by UCITs on their KIIDs..."
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You should be looking at a TER of under 0.5% and no other product or fund charges, 100% allocation, no bid/offer spread etc.
 
TRS30 said:
You should be looking at a TER of under 0.5% and no other product or fund charges, 100% allocation, no bid/offer spread etc.
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The TER, based on what I can tell, will be 0.60% AMC + 0.01% for the BlackRock fund. Being a company scheme, she doesn't have much say, so her goal is to pick the best/lowest fee fund.
 
mojoask said:
The TER, based on what I can tell, will be 0.60% AMC + 0.01% for the BlackRock fund. Being a company scheme, she doesn't have much say, so her goal is to pick the best/lowest fee fund.
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Just to clarify, I am not a pension expert or qualified financial adviser. I just have an interest from looking after my own and my wife's pensions.

You are correct, that when you are in a company scheme you don't have a lot of say however is good to know what kind of charges (if any) are being applied, as even small charges can eat into returns over the long term.
 
TRS30 said:
Just to clarify, I am not a pension expert or qualified financial adviser. I just have an interest from looking after my own and my wife's pensions.

You are correct, that when you are in a company scheme you don't have a lot of say however is good to know what kind of charges (if any) are being applied, as even small charges can eat into returns over the long term.
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Completely agree, and it's helpful to have 0.5% as a benchmark, which I presume you've managed to get yourself.

For comparison, my wife is coming from a PRSA with a 5% contribution charge, a 1% AMC, and a fund with a 0.10% on-going charge on top, so the new pension scheme is infinitely better from that basis.

She's going to go with the BlackRock index fund. I can't see there's a better option in the list linked above.
 
My wife is starting a company pension scheme in the coming month or two. No say in the provider (decided upon by the company itself). What are reasonable:

Allocation percentages? I see people recommending to look for 100% allocation, but is 95% allocation god awful or what?
Annual charges? Is 2% excessive? Should it be around the 0.5%?

She has a meeting with the pension provider next week so just drawing up a list of questions for her to ask before deciding how aggressive to go at the pension contributions in the next few years. Thanks!
 
PebbleBeach2020 said:
My wife is starting a company pension scheme in the coming month or two. No say in the provider (decided upon by the company itself). What are reasonable:

Allocation percentages? I see people recommending to look for 100% allocation, but is 95% allocation god awful or what?
Annual charges? Is 2% excessive? Should it be around the 0.5%?

She has a meeting with the pension provider next week so just drawing up a list of questions for her to ask before deciding how aggressive to go at the pension contributions in the next few years. Thanks!
Click to expand...

IMO you should be aiming for 100% allocation and less then 1% total charges, ideally closer to 0.5% (unless you are going into some specialist type of fund).

Another more than this is eating into your gains especially over the long-term.
 
mojoask said:
Completely agree, and it's helpful to have 0.5% as a benchmark, which I presume you've managed to get yourself.

For comparison, my wife is coming from a PRSA with a 5% contribution charge, a 1% AMC, and a fund with a 0.10% on-going charge on top, so the new pension scheme is infinitely better from that basis.

She's going to go with the BlackRock index fund. I can't see there's a better option in the list linked above.
Click to expand...

I'm in my third company pension scheme currently, I have invested in passive index equity funds in all of them with 100% allocation and TER's ranging from 0.55% to 0.26%.
 
I think the main question is what if anything is the company contribution and what do you need to do to ensure they max that out. There's a lot of variations in rules for matching, and to what level they'll match.

If say they match to 10% (though 5-6% is more typical) then you should really try to get 10% in there to take full advantage.

If possible ask what is the company policy on employer contributions if you leave within 2 years - some companies take them back.
 
PebbleBeach2020 said:
My wife is starting a company pension scheme in the coming month or two. No say in the provider (decided upon by the company itself). What are reasonable:

Allocation percentages? I see people recommending to look for 100% allocation, but is 95% allocation god awful or what?
Annual charges? Is 2% excessive? Should it be around the 0.5%?

She has a meeting with the pension provider next week so just drawing up a list of questions for her to ask before deciding how aggressive to go at the pension contributions in the next few years. Thanks!
Click to expand...
Ask them for the TER, you may have to badger them for it though.

For comparison, the TER on my occupational pension scheme is 0.21%, (global passive equity fund). From what I posted above, it looks like my wife's will be 0.61% for the same thing. Both have 100% allocation rates.
ashambles said:
I think the main question is what if anything is the company contribution and what do you need to do to ensure they max that out. There's a lot of variations in rules for matching, and to what level they'll match.

If say they match to 10% (though 5-6% is more typical) then you should really try to get 10% in there to take full advantage....
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Are you saying, maximise "free" contributions from your employer in their scheme, then put everything else in your own private pension (providing its charges are lower)?
 
PebbleBeach2020 said:
My wife is starting a company pension scheme in the coming month or two. No say in the provider (decided upon by the company itself). What are reasonable:

Allocation percentages? I see people recommending to look for 100% allocation, but is 95% allocation god awful or what?
Annual charges? Is 2% excessive? Should it be around the 0.5%?

She has a meeting with the pension provider next week so just drawing up a list of questions for her to ask before deciding how aggressive to go at the pension contributions in the next few years. Thanks!
Click to expand...
If the allocation is 95%, it means the employees are paying for the scheme through commission payments to the broker and not the employer, like they should be. All schemes should be paid by the employer and have 100% allocation.

The management charges will vary depending on the size of the scheme and who is paying for it. If you are in a large company, you are more likely to have the likes of Mercer or Aon doing the admin and the life company only does the investing bit. You'll then get lower charges as Mercer etc are billing the employer directly.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
mojoask said:
Are you saying, maximise "free" contributions from your employer in their scheme, then put everything else in your own private pension (providing its charges are lower)?
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I was trying to say to at least make sure the employer is paying in as much as possible, but if you can contribute more than that to the company pension then go ahead.
It probably would be difficult to find a private pension that would beat the company pension fee, and I'd find it simpler to have one active pension.

Also I think put in as much as you can from day one when you join the company. It will be hard to persuade yourself to adjust upwards afterwards.
 
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