When we get this question there are many aspects that rating. From our point of view we introduce a series of recommendations.
historical returns of the pension plan
Pension schemes managed long-term savings so it is important to not only look at results which has obtained the plan in the short term or in gifts or cash incentives that are offered at the time of hiring but, Additionally, base your choice on a stable management and under-age on the profitability in the long term. In the short term management of face decisions can be taken to the protection of the assets of the Fund which make that profitability isn’t overly attractive, however, the analysis of the historical evolution of the Fund yields will say if management has achieved a profitability sustained over time. The historical returns of the plans do not guarantee the future, but we can serve as a reference of how the plan has behaved especially if compared to the situation on the market at that time.
percentages of fixed-income and equities of the composition of the Fund
Not all pension plans are the same. The financial contributions of the participants of a pension plan must be obligatorily incorporated into a pension fund. It is very important that consumers attend the composition of this face pension fund to make a choice that meets your needs.
Composition of the Fund
Pension plans are financial instruments that have different types of investment according to the profile of risk aversion to the person who hired them. So, there are some from guaranteed pension plans, which guarantee an interest rate at the end of a certain period, being more conservative customer, until, at the other end, pension plans that invest all of their funds in equities the more suitable for profiles, being better suited for the more risky profiles and are willing to take greater risks in Exchange for obtaining higher yields. Between one and the other end There are retirement plans that combine different investment options to adapt to each client according to the risk that want to assume. For this reason, even in situations of maximum volatility of the markets, it is possible to find a pension plan that meets our labor-saving profile. Important thing is to have the appropriate advice to know in detail its features and choose the product that is best suited to the needs of each client. Each person has some investment preferences according to your needs and your saver profile. Why some people may prefer to invest their savings in pension plans that invest a high percentage of their portfolio in equities with the idea of maximizing its profitability even if that them a higher risk of loss. This is often the case of people with ages from the time of retirement or aggressive investor profiles.
Others, close to retirement or more conservative saver profiles, will prefer plans whose portfolio materializes main pension or totally in debt with the idea of protecting their heritage but that suppose to give up higher returns.
Risks that we take
Each saver has different needs at each point in time and presents a different position in terms of the expectations of profitability of their contributions and the risk to take with your investments. These two variables will determine the type of pension plan that will choose. Thus, for example, there are savers willing to risk a part or all of their money in equities with the idea pension plans get a higher return. They are aggressive saver profiles who seek high returns knowing that you can lose money. On the other hand a quite high percentage of savers prefer more conservative and safe investments, i.e. they prefer less profitable investments but with greater guarantee not to lose your money. The level of risk will always depend on our choice, and since there is wide range of plans, the most important is to have good advice to make a decision that suits each person.
duration of assets in fixed income in which the Fund is materialised
Fixed income is also volatile. Its value depends on the evolution of market interest rates. The venturer’s debt retirement plans is by definition conservative. In situations of rising interest rates, it will be preferable to opt for plans of fixed-income at short notice in order to protect their heritage and unlike in situations of low interest rate.
As we have said, the assets in which it invests a pension plan can be classified into fixed or variable income. This income fixed or variable can be in foreign currency or in euros. In order to make a choice according to your preferences the shareholder will have to select their pension plan investments in foreign currency have the effects of variations in the exchange rate.
expenses of the management of the Fund
The management companies charge for the performance of their duties and in accordance with what is specified in the rules of operation of the Fund, a Committee of management which may not exceed 2% of the assets of the pension fund annually.
the depositary of the Fund expenses
Depository institutions from the bottom is remunerated on the basis of the agreement between the management companies with and without which this compensation can exceed the annual 0.5% of the value of heritage custodian.
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