Our workplace pension charges have changed to comply with the new legislation capping default fund charges and banning commission and consultancy charging on qualifying and auto enrolment schemes.
We're committed to the intermediary market which is why we are implementing these changes in a way that supports your business, primarily by:
1. Commission / Financial Adviser's Fee (FAF) and consultancy charges (CC) |
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2. Product charges |
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3. Employer administration charge |
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4. Adviser charges |
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5. Default investments |
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6. Paid up members |
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We re-priced schemes that staged by April 2015 and removed consultancy charges from April 2015.
We'll re-price schemes that stage after April 2015 from the employer's staging date.
We'll be removing commission from the later of the employer's staging date and April 2016.
Examples:
Staging date | Scheme re-priced and consultancy charges removed | Commission removed |
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1 May 2015 |
1 May 2015 |
6 April 2016 |
1 Nov 2015 |
1 Nov 2015 |
6 April 2016 |
1 May 2016 |
1 May 2016 |
1 May 2016 |
From Monday 17 November we emailed you to tell you how each of your existing schemes that stage(d) before 1 Jan 2015 were affected by the changes and what you needed to do. You received one email per scheme. This email included a client summary that confirmed the terms and whether the current default investment fund was suitable or not. For schemes where the default was unsuitable from April 2015, we asked you to confirm a new default investment for the scheme.
Then from Friday 12 December, we emailed the employers to tell them about the changes to their scheme. For schemes where the default was unsuitable from April 2015, where you hadn’t already contacted us, we asked the employer to confirm a new default investment.
We continued to communicate with you, your clients and scheme members to:
Communication | Audience | Messages |
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External fund mailing email | Advisers | To alert advisers that we were mailing members of auto enrolment / qualifying schemes who we're not invested in the default investment and were in external funds with additional investment charges. We enclosed a sample copy of the mailing. |
CC stopping email | Advisers | Re-confirmed to advisers with affected schemes that Consultancy Charges (CC) will be stopping from 6 April 2015. |
Communication | Audience | Messages |
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External fund mailing | Active members with funds with additional investment charges |
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PUP/CPS mailing | Employers & Advisers |
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Where changes were made to members' charges and/or investments we wrote to them to confirm the changes had been made.
We have taken the decision to continue to pay commission because we value the partnerships we have with advisers and recognise that it will take time for advisers to fully transition to a fee based model.
We believe that high quality advice is essential in ensuring customers achieve the best long terms savings outcomes for them.
We have a long term commitment to providing workplace pensions and enabling you to help SMEs design, implement and run successful auto enrolment schemes for their employees.
The charge cap presents serious challenges to workplace pensions but we believe by working in partnership with you that we can deliver value for money solutions for pension savers at the same time as preserving the long term commercial viability of the intermediated pensions market.
For further information, please read our Q&As or get in touch with your usual contact.