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Anyone closed out their Provident fund recently?

Middle East Many expats still flying in Knoteetingham. Regional issues can be discussed here.

Anyone closed out their Provident fund recently?

Old 1st Apr 2015, 15:35
  #1 (permalink)  
Thread Starter
 
Join Date: Aug 1998
Location: Blandings
Posts: 697
Anyone closed out their Provident fund recently?

So if in a moment of weakness and/or boyish abandon you have stayed here for a couple of decades your A and B are about a million USD altogether. You have two options to get your hands on it once you are punted off the property:

-have them give it you with your final check in dirhams and you trot it down to Mashreq (!) and say "here my fine, trustworthy and efficient chappy, please do send this off to my home country error free as this sum represents a dream or two for my future". This is uncomfortable.

-have them instruct the Trustees to forward the money to you which, hand on heart, they say will arrive in the account of your choosing 3-5 weeks after you get your haggard corpse out of the UAE. This is uncomfortable.

Any recent evacuees willing to comment on which option they chose?
Dropp the Pilot is online now  
Old 1st Apr 2015, 15:45
  #2 (permalink)  
 
Join Date: Sep 2006
Location: not in Dubai anymore
Age: 90
Posts: 712
16 years 440k in A & B, not gonna make a million
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Old 1st Apr 2015, 18:30
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Join Date: Jun 2005
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Gore

I guess that's what the C funds for!

Harry
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Old 1st Apr 2015, 20:09
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Join Date: Feb 2015
Location: Dubai
Posts: 6
The question was, which option.

Take the money and run! in my opinion. Grab that cheque and leave with it otherwise it will take months to have it credited to your homeland bank. You will likely receive multiple emails regarding YOU not giving them the correct information in the meantime. By the way, the fact that the Provident scoundrels require a month to disperse the funds to a foreign bank, is another example of how you are being cheated.

If you choose to deposit it in a Dubai bank and you have left Dubai but still hold that account then there are certain risks with that option.
The banks in Dubai are not exactly obligated to give you access if they discover you have left.

As an aside, the Provident Fund is a joke. Yes, it's a forced savings plan which is a good concept but their limited options for investments and their available currencies are so limited, it explains what they are doing to you. Imagine running the Provident Fund, with an obligatory injection of 3K dhs each month from 3000 pilots, matched by EK. How could anyone go wrong managing that Fund? So you are in charge of 20 available Mutual Funds managed by supposedly wise people in finance, yet historically the Provident Fund gives returns of 2% per annum. Hilarious.

Don't believe some fellow pilot who declare they obtain 15% per annum or even higher. They are uneducated fools for sure. Investigate the returns for each fund and even if you manage to change your allocation at the most advantageous time, you will never achieve such results. In fact, the Provident Fund basically lies by showing Rates of Return (ROR) erroneously. They show it not as annually, but cumulatively. In other words, look at that number at the bottom and it might say 54% ROR but that is a lie. Honestly look at your contributions and EK's contributions, take the time frame and then google a ROR calculator on the internet. It's shocking when you realize the truth.

Historically the Provident Fund has given about a 2% ROR on each fund. Now take into consideration that they have a confirmed contribution amount to a very limited amount of funds...... so how is it possible that they defy not only the Markets but common sense. In other words, they don't even match Market performance.

After 15 years of slavery, you will be receive about 150K more than if Emirates did not have the Provident FUnd. In other words, EOSB in the UAE aren't that far off from the Prov Fund. Look into it, it's a magical deception.

EOSB benefits are what the country had to give to people by Law. The Provident Fund is what Emirates presents to their employees who don't know any better. It seems fantastic but it's only marginally better.
Not that the Provident Fund is a bad thing but it's not such a good thing as most people believe.
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Old 2nd Apr 2015, 08:32
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Join Date: Jul 2009
Location: Springfield
Posts: 281
If there is a cash fund within the Provident Fund denimoniated in your home currency, then sell all your other funds and buy the cash fund before withdrawing. Mr Mashreq will kill you on the spread margin otherwise....
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Old 2nd Apr 2015, 21:00
  #6 (permalink)  
 
Join Date: Sep 2006
Location: not in Dubai anymore
Age: 90
Posts: 712
harry,
I hope you didn't put anything in the C fund, the performance is a joke, even if they tell you that switching is for free you will always have to pay the management fee of the fund.
buy and index fund and you will be alright

A & B gave me a return of 0.5% over 16 years, I was in stocks and not in cash
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Old 3rd Apr 2015, 19:19
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Join Date: Jun 2005
Location: MIDDLE EAST
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Gore

Looking at your balance, I'd recommend you spend more time looking at what investments work for you rather than concerning yourself over ones that don't.

I do use the C fund and it's been doing very nicely over the years.

Harry
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Old 3rd Apr 2015, 22:02
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Join Date: Apr 2007
Location: Planet Janet (sand pit)
Posts: 66
P101...

2% a year? Lol which fund exactly were you in?

I've had the lot in Fids Intl for last 10 years and I've made a whole lot more than that. I don't even switch stuff around as I'm not that investment savvy so just leave it. My pots more that double my EOSB!

I'm quite pleased with my returns. The only issues I have is on currencies where I think more are needed as that's the problem when you get close to leaving and you have to cash out.

Happy firkin investment mate
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Old 3rd Apr 2015, 22:59
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Join Date: Sep 2006
Location: not in Dubai anymore
Age: 90
Posts: 712
if you joined 2008 you are better off then if you joined 98 because after 2008 it only went up
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Old 4th Apr 2015, 10:33
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Join Date: Jun 2005
Location: MIDDLE EAST
Posts: 1,040
GoreTex

Slight thread drift I know but like Foxy, many pilots do not have the knowledge or inclination to spend lots of spare time researching financial investments. That's why I think the PF is good for the lazy investor.....provided you avail of the 6 monthly meetings from Mondial. For something that's free, it amazes me that so many pilots don't use it and have only cash in their funds, some after being here 7 years or more. That in itself demonstrates how laissez-faire they are to their future.

For what it's worth, I was using the C fund way before 2008. Ironically, a volatile market is best for investments with dollar cost averaging. And when the market does fall significantly, then is the time to be actually increasing your units, not selling them like so many did. That's the advantage of the C fund.

Harry
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Old 4th Apr 2015, 11:45
  #11 (permalink)  
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Join Date: Aug 1998
Location: Blandings
Posts: 697
There are no advantages to the C fund.

Nice little slider calculator here. Go to the fund information sheets and plug in the fees and the time you have been contributing. You will find that your C investments should be 50% larger than they are now. Real money, gone forever, lost to your family and heirs and sitting in the pockets of people who did precisely NOTHING for you. You have, however, likely been great entertainment value.

https://personal.vanguard.com/us/ins...uth-about-cost
Dropp the Pilot is online now  
Old 5th Apr 2015, 05:28
  #12 (permalink)  
 
Join Date: Sep 2006
Location: not in Dubai anymore
Age: 90
Posts: 712
Dropp,
I 100% agree with you, a S & P 500 index fund would have made 10% per year for the last 10 years and has the least fees and risk but somebody in EK would have made less comission
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Old 5th Apr 2015, 12:51
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Join Date: Jun 2005
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GoreTex

"....would have made.." I assume from the use of the past tense that you decided not to invest in that. Isn't hindsight so wonderful after the event! I'm also curious as to who in EK you think will be getting commission. Commission on what exactly, the managed funds we select, actual use of the C fund or perhaps the number of Mondial visits pilots make?

As for the charges on the C funds, I've just recently received a rebate of charges and some dividends. The rebates were almost $1500 which were re invested. The charges for running the managed funds through the C fund are discounted from those available to the public. The link from Dropp is hardly rocket science and if you look at the figures carefully, you'll see that there's little difference between a .25% yearly fee and one that's free. Ultimately, it is what it is. Whatever the fund charges, I'd still rather get 10.1% a year after costs than 10% without.

I would like to get back on topic though by asking who has periodically cashed in some of their C fund. I did several years ago but there was a delay in transaction and I had difficulty accessing my accounts. I also don't recall receiving the actual date/selling price. It was in the ball park when I checked the papers but it could be open to abuse/fraud if this wasn't an isolated event.

Harry
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Old 5th Apr 2015, 14:15
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Join Date: Apr 2003
Location: UAE
Posts: 959
I don't understand why anybody would use the C fund with its very limited range of choices? If you invest in the real world you can choose from literally hundreds of funds. And you get your money back pretty much straight away if you need it out. Can somebody explain the attractions of the C fund?
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Old 5th Apr 2015, 20:24
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Join Date: Feb 2015
Location: Dubai
Posts: 6
HI Fox-something.
You are being deceived. I don't want this to turn into a slagging match because I only want to enlighten pilots at ek. But I believe that you don't realize that your ROR's are pathetic. I once enlisted my financial pal from Uni to investigate the funds offered by Prov. He sent me the info and confirmed my belief that those funds were vastly underperforming the Markets even though they had a guaranteed number of EK pilots funneling money into them each month. How does a limited amount of funds underperform the Market when they have a guaranteed and massive amount of money being deposited each and every month?? It's not possible unless it's a designed outcome. In other words, a scam to a certain extent.

So how is it possible that a semi-pension fund does not properly disseminate info to their clients? BECAUSE they are reaping the rewards and they don't want the truth to be known. Why didn't they allow the Canadians or Ozzies, I forget, pilots to invest in their own countries and currencies? BECAUSE, it's a mini-scam.

3K pilots donating a guaranteed amount each month to the 'limited' funds and those funds can't even match the Markets? It's insane actually.

So, Fox my friend. Seriously investigate the ROR's of the PRov fund and DO NOT even look at what they print at the bottom which is a purposeful deception. Heck, my funds said I got up to 54% ROR's at one point but in reality, I only got about 2% over the 15 years. Sit down one day, have a pint and calculate what you have contributed, what the Company has contributed and then find an internet ROR calculator and figure it out. IT IS ABOUT 2% overall.

I took the advice each and every 6 months from the financial dudes which was not so bad and my Fund was slightly higher than my peers who joined the same time as me. Yet for some idiotic reason, my pals all thought they were making bag loads of cash when in reality, they were being duped.
Trust me, when the few people who considered the fact that perhaps some individuals were raping us, decided to look into things, they were miffed. It's a mini-scam and that is for certain.
Just like Dubai, it's all a facade. Scratch thru the thin veneer and when you see the truth, it's not that pleasant.

Just my opinion.
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Old 5th Apr 2015, 21:14
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Join Date: Sep 2006
Location: not in Dubai anymore
Age: 90
Posts: 712
harry,
I didn't invest in the C fund and I am super happy about it, not investing in C will let me retire at 50, as of A & B I had no choice.

good luck with your C fund
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Old 5th Apr 2015, 22:43
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Join Date: Nov 2001
Location: Not sure now
Posts: 539
To answer the original question, there are actually two other options for someone leaving. I forget the exact wording on them. I think one was for pilots who officially retire. They can leave the money in the Provident Fund and let it ride. Another was to have it sent to a financial account other than a bank, i.e. an investment account anywhere of your choosing.

The process was fairly smooth and easy. To control the sales price you might want to sell to cash within a month or so of giving your notice, because there comes a point when you are no longer allowed to make switches.

I chose the wire transfer to bank of my choice option, and it came as advertised.

Now, as for some of the discussion on fund performance. I joined at the market nadir in the early 2000s. Quite fortuitous really. My average rate of return for the time I was at Emirates was good, but only because I actively managed the funds myself based on sound investing principles and slightly aggressive strategy. I did not, and would not, recommend Mondial. I have heard their advice and, if followed, would have resulted in far far worse rates of return than one can obtain by other methods. I did watch the ECAM blog:

http://emiratescapitalassetmanagement.********.tw/

But I made some moves different than ECAM based on the S&P 500 and DAX exponential moving averages. Selling to high percentages of cash when their were moves below the 200 day and buying back to high percentages of equities when there were confirmed moves back above the 50 day. That kind of a strategy might result in 2-3 changes in asset allocation per year.



Typhoonpilot
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Old 6th Apr 2015, 14:26
  #18 (permalink)  
 
Join Date: Feb 2015
Location: Dubai
Posts: 6
To believe that the Provident Fund is even in the realm of possibility of being a good investment strategy, is foolish. The Prov Fund has grossly under-performed the Markets and that fact is not debatable. Yet you might sit beside some pilot who professes to be knowledgable about finances who decrees that he is earning 10% or even 20% ROR in HIS Prov fund. He's not! But he doesn't realize it and that is the sad.

I emailed the Provident clowns regarding their method of sending info to pilots at EK because their methods were clearly deceptive. I questioned their number at the bottom of the statements and they responded with some BS about being to industry standards. They lied.
Google each and every fund in the Provident Fund and the average ROR is about 2%. Yeah it varies from time to time but the overall benefit is 2%. It's that simple.

A monkey would outperform those funds. They get a guaranteed contribution each and every month from you and EK...... think about that for a moment....... yet they underperform the Markets!
Your money is going somewhere else, I don't know where but you are being taken for a ride if you think the Prov Fund is a great thing.

The Prov Fund is OK because it's somewhat better than EOSB's but that is the extent of it all. Geeze, never listen to another pilot who professes that HIS Provident Fund is making shite-loads. He's a person who just doesn't understand reality.

In summary. I took the advice of the financial dudes, I spent between 10 to 15 years at EK and my Provident Fund was worth about 20% more than if EK didn't have that Fund and I only could get the EOSB's which every employee in the UAE is entitled to. Those are the facts.

In other words, the Prov Fund is OK but do not believe it's some magical thing that should be part of your thought processes if you want to come to EK. It's a facade.
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Old 7th Apr 2015, 19:28
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Join Date: Jun 2005
Location: MIDDLE EAST
Posts: 1,040
Thanks p101, i think you've made your point. 2% is all I'm going to get over time, right? Then perhaps I'll leave now before they can recover the satisfactory profit I've already made so far.

To be honest, the more I sift away, the less the wife has to spend on handbags and shoes.......for now at least!

Harry
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Old 8th Apr 2015, 10:58
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Join Date: Mar 2015
Location: Hotels
Posts: 20
"To be honest, the more I sift away, the less the wife has to spend on handbags and shoes.......for now at least!
harry"
right on chief, i hear you

Last edited by aileron droop; 8th Apr 2015 at 11:00. Reason: quote
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