Can you explain what you mean by "the fund went bust"?Thanks guys, and what would your views be if the fund went bust, would Zurich cover your loss or is it in the small print that they are not responsible. Thanks for your advices sofar
It's an investment fund, nobody is guaranteeing that there will be no losses.Loads of companies have gone bust due to poor governance or fraud, look at Lehmen Brothers, Worldcom and Enron. I would hope that Zurich has cover in place in the event of something like this happening or if there is no cover, will the Government of the country , where the fund is based guarantee any losses.
In a Life Assurance company unit linked funds are held in the name of the company. The investor is the beneficial owner of the funds which are nominally kept separate from the company's shareholder assets. I agree that in the event of insolvency by the company it would lead only to some disruption to customers accounts while the insolvency is resolved. The Central Bank, which regulates the industry, requires Life Assurance companies to report quarterly on its solvency position.First of all, the investment funds do not belong to the life assurance company that runs them but are held separately.
If a huge assurance company like Zurich goes insolvent, this would affect the shareholders in the main. There would probably be some disruption to the day to day running of the funds but that would get sorted
Loads of companies have gone bust due to poor governance or fraud, look at Lehmen Brothers, Worldcom and Enron. I would hope that Zurich has cover in place in the event of something like this happening or if there is no cover, will the Government of the country , where the fund is based guarantee any losses.
I know I should be able to give a definitive answer, given my background, but I think you're wrong on this @jpd It's the insurance company that invests in the funds. The individual has a policy with Zurich.First of all, the investment funds do not belong to the life assurance company that runs them but are held separately.
If a huge assurance company like Zurich goes insolvent, this would affect the shareholders in the main. There would probably be some disruption to the day to day running of the funds but that would get sorted
I am not concerned about the value of the investment dropping. That is my own risk, which I am prepared to accept. My query is, if something catastrophic happened to Zurich , would my losses be guaranteed. The funds I am currently in are the Dynamic Pension& Invest and Performance Pension and invest, both of which are managed by Zurich.By cover, do you mean insurance? If so, the answer is no.
The whole point of owning shares is to accept some risk, in return for higher reward.
That is the whole point.
If you can't accept that, put your savings on deposit, which are insured up to 100k.
Thanks Colm, that gives me some comfort. Essentially I am wondering if it would be wiser to spread your pension between different providers or would you be happy to leave your pension with one company. And if it is with the one company and a catastrophic event occurred within Zurich, how much of your pension would be either state guaranteed or underwritten by an Insurer.I know I should be able to give a definitive answer, given my background, but I think you're wrong on this @jpd It's the insurance company that invests in the funds. The individual has a policy with Zurich.
That said, I don't think the OP has any reason to worry. Zurich is required by regulation to hold an additional margin over and above the value of all its liabilities, including the the amounts invested in the funds for policyholders. If anything goes wrong, that margin is available to cover liabilities to policyholders.
What losses?I am not concerned about the value of the investment dropping. That is my own risk, which I am prepared to accept. My query is, if something catastrophic happened to Zurich , would my losses be guaranteed. The funds I am currently in are the Dynamic Pension& Invest and Performance Pension and invest, both of which are managed by Zurich.
I am not concerned about the value of the investment dropping. That is my own risk, which I am prepared to accept. My query is, if something catastrophic happened to Zurich , would my losses be guaranteed. The funds I am currently in are the Dynamic Pension& Invest and Performance Pension and invest, both of which are managed by Zurich.
Thank you and really appreciate your trusted opinionThose funds hold 620 different assets - mostly shares, along with bonds and some cash. For these funds to be rendered worthless, all 620 of their assets would have to become worthless.
Not only do Zurich Life have to maintain assets to match the value of policyholders' funds, but also an additional margin for safety over and above. They're not like a bank which can lend out client funds.
I would say the likelihood of total loss is very small.
Thanks Brendan , fortunately Sean Quinn was quite unique , I agree that it would be extremely unlikely for the likes of Zurich to stray off course . It’s difficult not to think about the what ifs , especially when it’s the majority of my retirement income I am placing with the one company .I think that the very large companies are very well capitalised and have a regime in place to stop something stupid happening.
But I was a big recommender of Quinn Life not realising that he was punting with money from the company. That could have impacted the solvency of Quinn Life.
Brendan
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