At a time when I'm feeling particularly sore about my own pension - having had it ripped out from under me after 33 years by a company that took years of "pension holidays", and variously used the fund to pay off criminally negligent senior executives and to bankroll redundancy programmes - here comes a Panorama expose showing that I wouldn't have been much better off in a privately-held scheme.
Panorama: http://www.bbc.co.uk/pressoffice/pressreleases/stories/2010/10_october/04/panorama.shtml
Pay in 120,000 over 40 years; lose almost 100,000 in fees and commissions.
How is it even legal to have 80% of your money taken away from a pot that is supposed to look after you in your retirement? Why are the fees so high? Because the average length any particular share is held is now one year, and buying and selling the porfolio contents - the "churn" - attracts bumper brokerage charges and fees. And then there's the bonuses to pay, even if the fund hasn't performed well. And finally - surprise surprise - many of the investments involve kick-backs to the fund managers, incentivising them (see how effortlessly he invents new verbs!) to leave your money in under-performing investments because they pay the biggest bribes.
Yet another example of how the financial world stinks, and lines its own pockets at the expense of the ordinary guy struggling to put enough by to be comfortable in old age. Is it just me, or is this kind of thing becoming WAY too common these days?
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I think they would like us to work and pay taxes as long as we can and then just go away.
I have no work related pension, so I'm going to have to depend on CPP and old age. It's not going to be fun. They've just changed it so that early retirement (60) will cost you plenty in the long run, 65 will bonus you, and if you choose to go to 70, things will be really good!
Looks like a big carrot to me.
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