Skip forward to 2017, for that 28 years of investment I am now the proud owner of exactly half a year's current salary. So much for their claims of the magic of compounding interest and investment returns. If I had just waited a couple of years, I would have been able to invest directly though my personal self managed superannuation fund. Based on my personal investment returns, I could have grown that sum of money into a high quality investment stream for my retirement.
So where did my money go? Their high fee structure sapped all the investment returns, they didn't post the investment returns and the fund was closed to new investors but wasn't combined with other funds to gain a critical mass of funds. Running a self managed superannuation fund isn't a cheap option but at least you have control of the investment criteria, returns and asset class selection. Why pay a manager to do what you do only to under-perform your actual returns for an outrageous fee?
Furthermore, they did not open an online account for this fund informing me that this is an old fund and they will not build an online portal. I would have to ring and make a personal appointment with their adviser during business hours to find out any information or wait until the annual report was mailed out. When I asked for details of how much I had contributed, the exact fees deducted and investment returns I was told I had been sent paper based copies annually and I should work it out myself. Now there is some excellent customer service for my outrageously high fees.
Pretty much all other funds have online access accounts including AXA and AMP accounts as the fund has been sold a number of times. It was pretty much this account that didn't go online tending to indicate the importance of this fund, I was always told this was an old closed fund but wasn't allowed to change funds within the group. Why would they?
They had a cash cow and I had signed on the dotted line all those years ago. I had always maintained my contributions, albeit these were minimum contributions for most of the period although I had made two large lump sum payments during the period. I had also allowed the monthly direct debit payments to be inflation adjusted but I knew these payments mostly went to management fees, this basically prevented a negative return.
So why didn't I get out earlier? Well, there is a clause where they keep a percentage of the account and that percentage reduces every year. I waited until now as the US market has been on a fairly large bull run and I needed to lock in those profits to account for the percentage of the account they would keep. Also keeping in mind how difficult it is to actually withdraw your money, they placed every difficulty and road block in my path.
I have never tried to leave the Church of Scientology, an outlaw motorcycle gang or the NAZI party, but I can only imagine it wasn't as difficult as getting out of the old National Mutual Retirement Security Plan and I have never felt the inclination to move to South America.
Finally, I have cashed out now and combined the funds with a low fee industry superannuation fund and even losing a percentage of the fund I will still be ahead. Fortunately, I opened an industry based fund so at least employer contributions were not profiteered into this account. With twelve years left to retirement, I have lost the advantage of compound interest but by combining these funds I may be able to salvage something of a reasonable retirement benefit after more than fourty years of employment.
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