THIS should be fun. For better or worse, I will soon be able to siphon, tax-free, a spoonful of the lovely retirement-fund pudding I have saved since 1996. Despite being damn excited, I do not expect a happy ending.
Nothing mirrors a more ghastly image of the asset-management and insurance industry than a tearful attempt to track the performance of one’s retirement annuity.
At present my asset management company is MMI, a bastard combination of old RMB interests and Metropolitan Life. In the process of that incorporation, my little RA has undergone some bewildering changes — none of which was illuminated by a progress report requested this week.
The policy matures on April 1 2015, but a third of its value ought to be accessible on my 55th birthday, which falls on July 4. So, in the interests of a stupid golfing holiday, I have done some homework (and will report back in detail as the due date arrives).
Dear me, what a mess. For one thing, according to missives from MMI this week, my original policy, bought from Protea Life, has a new number. And its name has gone from Metropolitan Odyssey to Momentum Prospector Universal. And my supposed postal address reveals that Old Mutual Life Assurance Company South Africa (Limited) is getting my mail.
What the hell is going on here?
I realised there were glitches in the system back in February 2004. I had decided it would be nice to find out how much my policy was worth and what its underlying investments were.
The series of articles in Business Times, titled “The Great Policy Robbery”, revealed a tragic tale of ineptitude. Sadly the story has got only more miserable.
The policy was sold to me by a wide boy from Port Elizabeth. As much as it was his fault for selling a dud, the practice at the time encouraged insurers to feed salesmen a fat stream of commission for the life of the policy. So my baby RA, after eight years of R500-a-month premiums, was worth just R20,498. Yet retirement planner John Williams worked out that R28,127 had been paid by me. Of that, the product salesman had earned R2502.38 including an initial fee and “renewal commission”.
In 2004, I discovered that my pitiful savings were spread between “packaged” portfolios containing 11 separate yet overlapping unit trusts, each charging fees. Goodness only knows what happened to those funds, and their managers: Prosure, Syfrets, NIB Equity and BOE. (Risk management rules say too much diversity means you might as well buy an index-tracker, at far less expense).
So I cut the underlying investment down to one in-house asset-allocation fund. Now I want to know what’s really going on.
• This article was first published in Sunday Times: Business Times