I’m Worried About My Pension Fund – What Should I Do?

Here we go again……… Pension Fund Worries

  • 2020 – Coronavirus Pandemic
  • 2008 – Financial Crisis
  • 2003 – 2nd Gulf War
  • 2001 – September 11th Terror Attacks
  • 2000 – Dot Com Crash
  • 1997 – Asian Financial Crisis
  • 1992 – Black Wednesday
  • 1987 – Black Monday

And that’s only in the last 33 years!

Your Pension Fund will have exposure to the Stock Market. Depending on your financial circumstances, age and other factors, and on advice from your Pension Advisor, this might be anywhere from 20% to 80% exposure.

What is likely to have happened to my Pension Fund? 

Well that’s hard to say. Since Jan 1st to March 25th the S&P 500 Index (biggest 500 companies in the USA) has fallen in value by -24%. At one point it was down -31%. This was the fastest decline since 1933. It may have stopped, or it may have further to go, nobody knows. As there are a vast array of pension funds options available, you may have had anywhere from very little to 100% exposure to the stock market crash. You need to understand what your exposure is. 

So why would any sane person invest in anything other than putting their money under the mattress when you look at the rollercoaster pension investors have to put up with? 

The answer is simple. Despite these severe and always unexpected events if you had invested $10,000 in the US Stock Market on Jan 1st 1987, by the end of February 2020 it would have been worth $170,200. That’s a gain of 1602% or 8.97% per annum compounded. 

However, it’s never an easy straight forward path and nobody should ever just place a bet on the stock market hoping it comes good just at the right time.

So, what should I do?

  • Professional Advice – you should be able to contact your Pension Advisor in times of crisis and get an explanation of what is happening, why it is happening, and discuss what actions should or shouldn’t be taken. If your Pension Advisor hasn’t contacted you in some way over the past 6 weeks, then you don’t have an Advisor, you have somebody who sold you a product. It’s now that you need them most so it’s time to seek out advice. You definitely need to meet with your Pension Advisor every year to make small changes to your portfolio as you get older, and as your personal and financial circumstances change. Nothing radical, just some basic housekeeping, and perhaps looking at capturing occasional investment opportunities as they pop up.
  • Diversification – you need to make sure you have a well-diversified pension fund with plenty of equites, corporate and government bonds, property and more. It helps protect you from the full force of stock market crashes. It’s also why having a Pension Advisor with you on your journey is so important. It helps you plan for these events and navigate your way through them.
  • Bigger Picture– your Advisor should have constructed your pension portfolio as part of your overall retirement plan. By this I mean, if your pension represents 50% of your future retirement assets then you can in broad terms afford to take more risk with your fund and ride our market volatility. However, if your pension fund represents 100% of your future retirement assets then perhaps you need to reassess what investment strategy is appropriate for you as this will not be the last stock market crash you live through.
  • Time to Retirement – if you are 40 years of age with no intention to retire for at least another 20 years you are likely to be worried, but less worried, than a 55-year-old planning on retiring in 5 years’ time. As you get older your Pension Fund should gradually reduce your exposure to financial market volatility, not completely but certainly far less than you had when you were younger.
  • Pension Fees– make sure your fees are reasonable. Nobody works for free, but pension fees can reduce the final value of your pension by as much as 1/3rd over the lifetime of your pension fund.
  • Transferring your Pension Fund to Cash? -it’s at times like these that pension investors are tempted to transfer into cash funds – ‘I don’t like what’s happening, I want it to stop’. Trying to time the market is almost impossible. Transferring from equities to cash at the right time, and back again at the right time, and getting it right every time the stock market crashes, is just not possible. You might be right the odd time, but you are more likely to miss most of the good years, than avoid most of the bad years.It’s a cliché, but like most clichés it happens to be true, the key to successful pension investing is ‘time in the market, not timing the market’.Having a well-diversified pension portfolio eliminates the need to jump in and out of cash every time the stock market falls.

But this time it’s different? Yes, this time it is different. Families will lose loved ones and people are scared. People on the front line are bearing the brunt of this awful situation and we all need to support them in every way we can. But even though it’s different this time, every major stock market crash has one thing in common – they all happen for different reasons. The next one will happen for a different reason, and the one after that, and the one after that too. What is far more important is that you are getting professional advice to help you navigate these difficult times.

I hope this helps you make sense of your Pension during this difficult time. Please reach out to us, we are here to help you and to protect your family’s finances now and in the future.


Thank you for reading and take care.


Michael Coburn & Jim Doyle
Guardian Wealth
Serving the South East, Midlands, East Coast & Dublin
Email: mcoburn@guardianwealth.ie
Phone Joanne on 01 5260770