I just read a New York Times aricle about Leon Black and his company, Apollo. A nasty outfit by the sounds of it. The article states that some of Apollos best customers are pension funds. In 2016 Apollo used the pension funds to slash health and retirement benefits for the very same workers who had paid into the fund. Imagine finding out that you had spent your working life saving up to fund the demise of your working life. The workers went on strike for over three months through a New York winter but lost to Apollo. That is just one of the many horrible things this maleficient company profits from. It is apalling how our investment decisions can betray us.
First State Super (FSS) who manage my pension fund are no different. I was invested in private equity as well as ‘other alternatives’, whatever that is. Luckily for me FSS allows me to switch investments with no charge. I switched it to plain old Australian and International equities 50/50. According to a letter sent to Pat the Shuffler FSS outsources the management of these to Vanguard. This gives me a little peace of mind that I won’t be directly funding a dodgy firm ripping the heart out of healthcare (my industry). If there was a way I could also not encourage private heathcare I’d be even happier.
I feel better that I have wrested some control over my Superannuation but I am still frustrated by the ridiculous fees I get charged. This is an Australia-wide problem with the Superannuation industry. Of course I expect some fees but the amount seems disproportionate. If my broker can survive charging me $10-20 a trade why does FSS charge me ten times as much for what is essentially the same thing.
In his book and his forum The Barefoot Investor recommends the HostPlus Indexed Fund for it’s low fees and more recently highlighted REST for having no fees. Pat the Shuffler wrote three posts about his own search for a decent Australian Super fund from a similar perspective to me. It is of course about more than the fees and Pat ended up choosing the same fund as me despite them.
I suppose we are making the best of a bad lot and we must remember, to paraphrase Dory, ‘Just keep saving‘…
There is talk of Vanguard starting a low cost and hopefully more transparent superannuation fund. If so, I expect I’ll return to this topic soon (I can almost hear my Mum muttering, ‘Oh, how ghastly’).