We reveal the worst pension funds
Bestinvest has campaigned to raise awareness of poor fund performance for over two decades through our landmark Spot the Dog guide. We have now turned our attention on the UK pensions industry with the publication of a damning new report: Spot the Dog Pension Edition.
Spot the Dog Pension Edition has identified 113 pension funds, with combined assets totalling approximately £31 billion, that have consistently underperformed. To earn a place in the report funds must have failed to beat their benchmark* over three consecutive 12-month periods in succession and also by more than 10% over three years.
The report also names a set of 40 funds in four major Association of British Insurers pension fund sectors that we have dubbed the “Long-Term Laggards”. These have undershot the average fund in each sector by more than 20% or more over the last decade. Many of the dullards highlighted are “legacy” pension funds, acquired by pension fund consolidator firms who have taken-on assets from former life and pension providers that have closed to new business.
The filters we have applied are designed to highlight the “worst of the worst” and there are many more funds out there delivering pedestrian returns, so the new report merely represents the tip of the iceberg.
The performance of your pension funds really does matter as the price of tolerating poor performance will quite literally be a worse off lifestyle in your retirement. Spot the Dog Pension Edition is a wake-up call: your pension is too important to ignore and you do not have to put up with dire performance.