Zurich Pension Fund - SuperCAPP - Terrible Performance

Hi All,

I'm 36, I started investing in my pension when I was 29 or 30. I contributed for a few years until I decided I'd rather put the money to work myself than leave it to a pension fund. I didn't pay any attention to it since then, until now. I had 30K in it about 5 years ago. It's now worth 28K. How are Zurich so terrible with my money? Granted the last two years have been dodgy in the markets but previous to that, you could have closed your eyes, picked some stocks at random and you would still be up money.

I've enquired about taking the money out but I've been advised I can't do that. I have to leave it in the fund. Is this the norm? Is everyone else's pensions performing as badly as this? Am I just being over critical, is this the norm for pension funds?

I'm glad I stopped contributing to the fund when I did, with that kind of performance everyone would be better off managing the money themselves.

Always Learning said:

I contributed for a few years until I decided I'd rather put the money to work myself than leave it to a pension fund.

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That was a very shortsighted decision.
You missed out on the tax relief on contributions and growth since then.

Always Learning said:

I didn't pay any attention to it since then, until now.

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And this.

Always Learning said:

I had 30K in it about 5 years ago. It's now worth 28K. How are Zurich so terrible with my money?

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What is it invested in?
What charges apply?
Did deemed disposal kick in at any stage?
Isn't SuperCAPP a low risk/reward product?
Maybe any marginal growth (and original investment) has been eroded by charges?
A pension involves an almost lifetime investment timeframe and should arguably and generally be invested largely or solely in equities rather than bonds/cash especially where somebody is not on the verge of retirement.
And possibly still even then.

Always Learning said:

Granted the last two years have been dodgy in the markets but previous to that, you could have closed your eyes, picked some stocks at random and you would still be up money.

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Maybe you should've chosen a low charges index tracker instead?
But you most likely should've just stuck with a pension.

Always Learning said:

I've enquired about taking the money out but I've been advised I can't do that. I have to leave it in the fund. Is this the norm? Is everyone else's pensions performing as badly as this? Am I just being over critical, is this the norm for pension funds?

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This is confusing.
You suggested above that you invested yourself instead of using a pension...?

The SuperCAPP Fund is a Unitised With-Profits fund that aims to deliver a regular return to policyholders consistent with prevailing medium-term interest rates while maintaining the potential for higher growth than a bank deposit account over time.

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That fund is a low risk fund aimed at tracking interest rates over a period of time where interest rates have been historically low. It seems the fund met its investment objectives. What were you expecting and does this align with the characteristics of the fund?

If you are mid-30's I would be focusing on more equity based returns. You could switch to something like their Dynamic or 5 star funds.

My PRSA was with Zurich until recently and for a couple of decades and performed very well. It wasn't in SuperCAPP but high equity content/index funds and had low charges. And I didn't try to manage it myself or invest outside of a pension due to the very generous pension tax relief available.

Always Learning said:

I started investing in my pension when I was 29 or 30.

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The SuperCapp fund is one of Zurich Life's low-risk fund choices. Were you advised at the time to go into a low-risk fund at 29 or 30 years of age?

Always Learning said:

I've enquired about taking the money out but I've been advised I can't do that.

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Were you not advised about earliest retirement ages when you started this pension? Depending on the type of pension product and your circumstances, earliest retirement age allowed in this country is 50, except due to ill-health.

Always Learning said:

I had 30K in it about 5 years ago. It's now worth 28K.

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Does the figure include any Early Exit Charges?

The SuperCapp fund also usually pays a Final Dividend to those who remain in it for a period of time.

I think so called "low risk" funds have performed terribly this year and are actually down more than "high risk" funds. The reason is that they have a high proportion of investment in bonds which are terrible investments during times of high inflation like now. At least "high risk" funds with equity investments while they are volatile can benefit in the upswings and the earnings of equities increase as they can also push up the prices of what they produce.
The investment fund industry should be required to remove the headings "low tisk" and "high risk" as they are totally misleading and untrue

It was 100% my own fault, at the time I had no idea about investing. I just thought that if I started putting 10 or 15K a year into a pension fund that I could sit back and compound interest would leave me a nice big lump sum years down the line. The guy selling me this pension done a questionnaire with me and invested my funds based on that, which is fair enough.

I'm pretty financially savey in most regards, but I had no idea what I was signing up for with this. In the meantime I've educated myself quite a bit in regards to investing in property and shares, but never paid any attention to the pension. I changed my strategy over the years and decided I'd be better off investing any money I make now and create my own property nest egg for when I'm older. As fate would have it, I've ended up being semi-retired quite early. I don't have a 9-5 now and my aim is to make my money work for me. That's when I decided to check how the pension was doing as I hadn't checked in years. I was shocked to see how poor it was performing, but maybe I shouldn't be considering the lack of attention or due diligence I gave to it.

I'm unsure going forward if starting up pension contributions is worth it the opportunity cost or not. I'll have to get reading! I only made the post here to see if others had similar experience with their pensions over the last 5-6 years. Or maybe there are some really good funds out there I could switch to.

Always Learning said:

It was 100% my own fault, at the time I had no idea about investing.

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And yet...

Always Learning said:

I'm 36, I started investing in my pension when I was 29 or 30. I contributed for a few years until I decided I'd rather put the money to work myself than leave it to a pension fund.

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Seems odd.

Also, I'm still confused about what you're investing in now. A non pension or a pension SuperCAPP fund? You seem to say both at different times. Either way, SuperCAPP is almost certainly the wrong thing to be invested in for pension purposes especially at your age. Far too cautious.

I and others have given some useful guidance above.
If you are still confused then you should probably talk to a fee based independent financial advisor or at least keep asking questions here.

Always Learning said:

I changed my strategy over the years and decided I'd be better off investing any money I make now and create my own property nest egg for when I'm older.

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You mean outside of any pension structure?
Doesn't that mean that you're missing out on the generous tax relief on pensions - contributions, growth and at drawdown?

Always Learning said:

As fate would have it, I've ended up being semi-retired quite early.

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At 36?

Always Learning said:

I don't have a 9-5 now and my aim is to make my money work for me. That's when I decided to check how the pension was doing as I hadn't checked in years. I was shocked to see how poor it was performing, but maybe I shouldn't be considering the lack of attention or due diligence I gave to it.

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As mentioned already SuperCAPP is largely akin to deposits so it was never going to give much return.

Always Learning said:

I'm unsure going forward if starting up pension contributions is worth it the opportunity cost or not. I'll have to get reading! I only made the post here to see if others had similar experience with their pensions over the last 5-6 years. Or maybe there are some really good funds out there I could switch to.

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You're judging things on the basis of a poorly chosen, non pension (?), far too cautious investment find, over a mere 6 years which is only a small timeframe in the greater scheme of pension timeframes.

You should probably start reading here:

ClubMan said:

You mean outside of any pension structure?
Doesn't that mean that you're missing out on the generous tax relief on pensions - contributions, growth and at drawdown?

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Yes, outside of any pension. Yes I am missing out on tax relief on pension contribution. But at the rate my pension was performing, it looks like I've been outperforming it every year anyway, so maybe I was better going the property route.

ClubMan said:

At 36?

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Fortunately, yes.

ClubMan said:

As mentioned already SuperCAPP is largely akin to deposits so it was never going to give much return.

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Something I should have paid attention to and didn't.

ClubMan said:

You're judging things on the basis of a poorly chosen, non pension (?), far too cautious investment find, over a mere 6 years which is only a small timeframe in the greater scheme of pension timeframes.

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I'm going to do some reading and talk to my tax man to get advice on how to proceed. Am I better off to invest the money I have now in property and shares and build up my own nest egg, or set aside say 200K to max out my pension. Unfortunately, I have no PAYE income at the moment. The money I have is the result of the sale of a business and has already been taxed, or else it is rental income. I'm not sure if I can put that into a pension fund and avail of the tax relief?

Always Learning said:

Yes, outside of any pension. Yes I am missing out on tax relief on pension contribution. But at the rate my pension was performing, it looks like I've been outperforming it every year anyway, so maybe I was better going the property route.

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It's not a good/fair comparison if your pension was invested in the "wrong" type of fund in the first place.

Always Learning said:

Am I better off to invest the money I have now in property and shares and build up my own nest egg, or set aside say 200K to max out my pension. Unfortunately, I have no PAYE income at the moment. The money I have is the result of the sale of a business and has already been taxed, or else it is rental income. I'm not sure if I can put that into a pension fund and avail of the tax relief?

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You should do a Money Makeover post using the template in that forum. It's not really possible to give useful advice, other than that already mentioned by me and others above, without a better understanding of your overall financial and personal situation, priorities etc.

I hadn't seen the Money Makeover section before, I just took a look. I'll post something there once I have a little time. Thanks.

I had SuperCAPP for a few years, noticed it performed poorly.
Nobody, including my pension broker advised me to switch funds.. they were happy to keep taking trail commission.
Luckily I copped on 5 years back, got into FIRE mode, ended up retired early.

fistophobia said:

I had SuperCAPP for a few years, noticed it performed poorly.
Nobody, including my pension broker advised me to switch funds.. they were happy to keep taking trail commission.
Luckily I copped on 5 years back, got into FIRE mode, ended up retired early.

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Really, well done. I've always been intrigued by FIRE. Out of curiosity, how many years of following that philosophy did it take you to retire early? Did you go extreme into it?

If you go to a financial advisor and say you want a low risk option they'll put you into this sort of fund. It's not the customers fault - they're not experienced investors and they want to move from cash to something safe with slightly better returns. This product will appear to tick the boxes.

Irish fund charges and (outside of a pension) Irish taxes on a fund that targets beating cash deposits (looks like it tries to follow the 10 year gov bond yield) means the fund over the long term will likely not beat cash or at least not significantly enough to justify it over cash.

As part of a pension it could be an alternative to cash - as similar fees usually exist on both cash and funds so you might see the better return - if they manage to achieve it.

Always Learning said:

Really, well done. I've always been intrigued by FIRE. Out of curiosity, how many years of following that philosophy did it take you to retire early? Did you go extreme into it?

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5 years, started early 40s, went all-out, 80% savings rate. Its not a popular topic on here so send me a PM.

fistophobia said:

5 years, started early 40s, went all-out, 80% savings rate. Its not a popular topic on here so send me a PM.

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Better to share your thoughts publicly, no?

fistophobia said:

Its not a popular topic on here so send me a PM.

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Really? I haven't really seen it discussed here recently, never mind criticised. I notice this thread from a few years back, but asking for "positive vibes only" sounds very cultish and is going to get short shrift here - and rightly so!

Always Learning said:

Hi All,

I'm 36, I started investing in my pension when I was 29 or 30. I contributed for a few years until I decided I'd rather put the money to work myself than leave it to a pension fund. I didn't pay any attention to it since then, until now. I had 30K in it about 5 years ago. It's now worth 28K. How are Zurich so terrible with my money? Granted the last two years have been dodgy in the markets but previous to that, you could have closed your eyes, picked some stocks at random and you would still be up money.

I've enquired about taking the money out but I've been advised I can't do that. I have to leave it in the fund. Is this the norm? Is everyone else's pensions performing as badly as this? Am I just being over critical, is this the norm for pension funds?

I'm glad I stopped contributing to the fund when I did, with that kind of performance everyone would be better off managing the money themselves.

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This is madness.

You were in a strategy that’s completely inappropriate for you.

That’s not Zurich’s fault - It’s yours!

The fact that you say you’ve educated yourself around shares and property in the interim chills me to the bone. That’s a recipe for blowing yourself up, as are your claims around being ‘financially savvy’.

Then you say you’ll ‘talk to your tax man’ about your pension and how it’s invested; what value will he be able to add? You might as well talk to your electrician!

It’s important that you get good advice, and part of good advice is sense-checking what a client says. When a 30 year old pitches up, says he’s low risk, and asks for SuperCapp, the appalling advisor facilitates it. The good advisor starts a discussion about risk.

Gordon Gekko said:

That’s not Zurich’s fault - It’s yours!

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I'm fully aware and I've said as much.

Gordon Gekko said:

The fact that you say you’ve educated yourself around shares and property in the interim chills me to the bone. That’s a recipe for blowing yourself up

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Really, learning the ins and outs of the property market is a recipe for blowing yourself up? And your worried about my financial savvy The property market has been extremely good to me over the last 6 years since I entered as an investor.

Gordon Gekko said:

as are your claims around being ‘financially savvy’.

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Are you here to be childish and insult people or is this a form where people can seek advice and discuss money matters as adults? Yes, I consider myself quite financially savvy, what's so abhorrent about that to you? I've retired at 36 with significant funds and no debts. If I never invested my money I would still never need to work again. However, I'm here to continue to educate myself around financial matters and take on meaningful advice... but I draw the line at being lectured to by pretenders who haven't done it themselves.

Gordon Gekko said:

Then you say you’ll ‘talk to your tax man’ about your pension and how it’s invested; what value will he be able to add?

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If you don't talk to your tax man to weigh up the pro's and con's of one type of investment over the other, then you either haven't got much to invest or you've got a This post will be deleted if not edited to remove bad language tax man.

Ridiculing people for their posts here only serves to put people off asking honest questions and being open here. I'd be pretty surprised if as a community that is apparently here to discuss money matters openly, that's the vibe your going for. I can tell you as an outsider looking in though, that's the vibe you give off.