The subject of supplementary pensions often recurs on My Business; I talk about it in a special section of the blog in depth.
In this article I want to report the ranking of the returns of the separately managed accounts linked to the individual pension plans with the 2017 data so as to give you the opportunity, briefly, to make a comparison between the various companies and banks that place pension-oriented products.
The data were processed by the Mia Prometeia observatory for Il Sole 24 Ore (link) and obviously concern last year since 2018 has yet to end.
Classification of Separate Managements Linked to PIPs in 2017
- Name of separate management: Concrete Pension, Genertellife company. Gross yield%: 4.40.
- Name of separately managed account: Vip, Zurich Invest company. Life. Gross yield%: 3.98.
- Separate management name: Safe Insurance, Società Cattolica company. Gross yield%: 3.88.
- Name of separate management: Ri. Alto Previdenza, Genertellife company. Gross yield%: 3.81.
- Name of separate management: Ergo Prev. New Ppb, Ergo Previdenza company. Gross yield%: 3.75.
- Name of separately managed account: GaAs Global, Generali Italia company. Gross yield%: 3.66.
- Separate management name: Guaranteed Ally, Alleanza company. Gross yield%: 3.60.
- Name of separately managed account: Reale Previdenza, Reale Mutua company. Gross yield%: 3.60.
- Name of separate management: Posta Pensione, Poste Vita company. Gross yield%: 3.53.
- Name of separately managed account: Gepi, Aviva Spa company. Gross yield%: 3.40.
How to read this ranking?
My philosophy with respect to managed savings is public and I have been pursuing it for years: you have to read the data carefully and not stop at gross returns only.
In fact, pension products, in addition to differing in returns, have a series of characteristics that must be known in order to make a precise comparison. I report them below:
1. Levy on returns
Depending on the case, a levy on returns is applied by the separately managed account, which can even reach 1%. To understand, in the worst cases, if the separate management gets + 3%, 2% is paid to you.
The initial loadings must also be subtracted from the current account – that is, all the expenses that occur which, according to a recent analysis by Visas, can reach up to 5% and the periodic annual ones that last for the entire duration of the contract and can also reach the 1% per annum.
3. Management costs
Not all PIPs have a separate management basis, others can rely on funds that may have one-off percentage entry costs and annual management costs (egg: 1% per annum regardless of the result).
My views on pension products
I’ve talked a lot about the topic, you can read my general article to get an idea. Briefly, I tell you that I am fundamentally skeptical of these products (understood as a general category, I have no aversion or preferences for a particular bank or insurance) because I look at the sector with distrust.
When you rely on products of this type, in fact, you ALWAYS have the following critical issues:
- Constraints on the management of your money: in the case of supplementary pensions, they are provided for by law (you cannot take all the capital in advance except for special events, for example);
- Constraints on choices: with “packaged” products you give general indications (example: balanced investment, equity investment, etc.) but you cannot decide on the merits of which securities to buy and why in the course of work;
- Costs too high: When you invest, costs are a problem for you because they reduce your returns. Products of this type usually have two “mouths to feed”: the sales network (generally made up of the bank, the insurance company or the promoter) and the management company that physically manages the money. Even in virtuous cases, the cost scheme must still remunerate these two entities when on the market, with limited effort, you can choose products with lower costs and only one “mouth to feed” (I don’t want to digress, read my article on ETFs to know more).
I hope I have provided you with enough information to evaluate the products in this category in a precise and useful way for you.