BIAM - poor performance

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pinkyBear

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This may seem a really stupid question. I am working for a company that use BIAM to manage their pension fund- I read in yesterdays times that this past year BIAM has been the second worst performing fund, and over the past 3 years the worst.

2 questions:
1) Can I choose my own pension fund?
2) Is there anything I can do?

Kind Regards,
 
If it is an occupational pension fund, then no, I don't think you have any choice in who manages the fund.

What can you do? It depends. Is the pension scheme optional or compulsory? I would presume it is compulsory, and in that case, there probably isn't much that you can do, except maybe raise your concerns with the trustees of the scheme.
 
Hi pinkyBear

Is it a Defined Benefit or Defined Contribution Scheme?

If it is Defined Benefit you should not unduly worry about investment return.

If Defined Contribution, the trustees could (should!) consider appointing a second (and even a third) investment manager to give greater choice to members.
 
Occupational you have no choice except to register your feelings with the trustees of your pension fund. But if it is a PRSA scheme you can choose your provider yourself however you will unlikely get it processed through your payroll if it differs from your companys selected provider.

So you will not get the benefit of gross relief on pension contributions through payroll, but you will be able to claim this relief back yourself from the revenue, Same with AVC's I believe.

I do not work in this area but this is my understanding, you can query this with HR in your company.
 
Hi Guys,
The pension sheame is Defined Contribution - and I have recently upd my AVC contribution to the max 20%- hense my concern.
 
Try to get the trustees to consider adding new fund managers...costs them nothing if it is a large scheme!
 
pinky
Does the performance table you saw give the performance for individual funds or just the fund Managers ? I have been looking at a Pensions Managed Funds survey from Rubicon Investments Consultants which places BIAM mid table. However it doesn't distinguish between funds i.e. It has a figure for Canada Life/Setanta but from the Canada Life website they have 7 Setanta Pension funds. I've just started looking at my own pension and where it's invested and would like to see performance figures for individual funds.
 
Abbey

As a rule, such Fund Manager League Tables compare the 'Pensions Managed Fund' of each of the various fund managers - each manager has so many different funds it would be difficult to survey them all...so the Investment Consultants tend to combine a league table comparing the performance of the 'basic' Managed Fund run by each of the managers, this gives a reasonable guid as to how each is performing.

BIAM still look good over the longer terms (7-10 years) but quite poor over shorter terms (1-3 years).
 
I have a BIAM All Equity Fund and while all the others have done well this is a dog. The trustees meet with BIAM management and were not confident going forward and they are moving all the funds to Eagle star.
 
Performance over a three year period will not have much effect on your pension. What matters is the long run performance. I would not necessarily be unduly concerned about 3 years poor performance unless there are other reasons for doubting the ability to do well over a longer period.
 
You could highlight your concerns to the trustees of the pension scheme, the annual report issued in respect of the pension scheme should contain details of the investment performance of the funds the scheme assets are invested in.

There is a requirement under trust law that trustees of a trust, not necessarily just a pension trust, invest funds in what is considered a prudent manner.

If BIAMs investment returns are that poor the trustees may be under an obligation to consider changing investment manager or atleast reviewing their position with regard to BIAM.

However they may have already done this and decided to stay with them.
 
alot of pension funds have to lock in for a set number of years.

BIAM aint looking too hot the last five years.
Goggins gone,
Reilly leaving next year...their star stock picker.

Senior management have lost 50% of their talent pool to companies like Perpetual.

But they do have lovely new offices!!!...but wouldn't fancy one of their employee bonus cheques this xmas, could be just brussel sprouts all the way!!
 
I think Shane Ross has been banging on about this crowd for the past number of years in the Sunday Indo,

Utterly useless. (ho-hum!)


Murt
 
BIAM is a fan of 'old fashioned' quality companies.

That is:

  • Company that makes steady profits
  • Pays a consistent dividend
  • Has transparent accounts
Their returns were outstanding when the bubble burst and every other investment manager was bleeding because of exposure to Tech.
BIAM never invested in Tech, they are hurting now because the bull run of the last three years has been more pronounced in smaller cap stock than larger cap stocks.

Don't blame Chris, the 'talent pool' that left or anything else - it's the BIAM way...expect them to perform when the bull run ends.
 
When are you retiring? If it's decades away then I wouldn't make too many judgements over the performance of 3 years. You're in a long term investment? In the same way it's a mugs game to time the markets, it's an even bigger mugs game to time switching to a different fund manager. If I've learnt anything here it's that no company consistently outperforms the average. Maybe you're best going into a tracker fund of some sort - they have 'consensus' funds in several places.
 
You might get lucky on the Past Performance is not a guide to future performance thing.

If the Investment focus is as described above (Boring but Steady companies) and you've got a few years until you cash it in, then I think you'll do as well or better in the long run as most other funds.

In fact in the long run I'd expect you to be near the top of the table.

It's worth keeping an eye on though. If the returns consistantly trail the market year after year then you need to start asking what they are doing to defy the odds, because statistically a few bad years should be followed by a few good ones.

In fact, some studies have found that on average the worst performing funds in a given year are likely to be among the best performing in the subsequent year.

I tend to think of funds like soccer teams, I have this feeling that if the team of investors is good at what they do, then performance should be consistent. But in practice this apparently isn't as much the case as you'd think.

Bottom line, I wouldn't worry...yet. But keep an eye on it.

-Rd
 
Hi there - have spoken to pension admin, and she got intouch with the organiser of the pension - as a result of the query they are planning to set us up in fuds where by we can diversify.
 
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