Finding out pension charges

jasmine51

How can i find full details of the charges on my existing pension? My pension company have told me they wont provide this information! The original IFA who sold me the pension wont help me. I am drawing a blank.

dunstonh

Is this an occupational pension or a personal pension or a retirement annuity contract (or other)?
How exactly have you worded the question? (if both are being difficult then perhaps your question isnt clear or is asking commercially sensitive information that doesnt impact on you directly)

The charges are pretty easy to work out on most money purchase schemes and form part of the initial illustration. The impact of charges can also be calculated by pension analysis software by most IFAs.

Daniel_Elkington

If this is a final salary scheme then they don't have to tell you.

If this is a personal pension then that is rather shocking. What pension company is your pension with? It should be really easy for them to tell you.

You could try looking at the illustration that you should have been given. Alternatively the IFA should have provided a suitability letter, which should confirm all the charges.

jasmine51

Thankyou for your replies. This is a personal pension from Zurich. An IFA recently reviewed my pension forecast that Zurich supply every year and said that the illustration amount just wasn't possible given the level of charges in the initial paperwork I had in 1999. It appears they take 65p in every £1 as charges! Zurich wouldn't expand on their calculations and just said their illustration was correct. As I said the IFA has done the calculations and said it just isn't possible. I can't get any joy from Zurich when I asked them to comment on the IFAs findings.
Is there any wording I should use when I go back to them? What should I ask?

dunstonh

This is a personal pension from Zurich. An IFA recently reviewed my pension forecast that Zurich supply every year and said that the illustration amount just wasn't possible given the level of charges in the initial paperwork I had in 1999.

Is this an old Allied Dunbar plan?

If so, that may explain the charges being "Not possible". They are possible and the reason is two parts.

1 - The bulk charges were on contributions paid or when contributions were being made and not an annual management charge. So, a paid up personal pension can appear impossibly cheap. If you are not paying into the plan then no AMC exists.
2 - They can have capital/accumulation units where the charge is not on the contract but within the fund and this doesnt get included on the actual pension projections. That is a nightmare for an IFA trying to justify a pension transfer as it appears the recommendation is more expensive than the existing plan. yet when you compare the performance of the same fund using the two different types of units, you can clearly see the impact of those "hidden" charges.

soperman

You should be entitled to receive this information and if Zurich are being obstructive you should make a formal complaint to them.

However, before doing so write a letter to Zurich and ask them to confirm in writing:

1. Was there an initial period when I commenced my policy.
2. During any initial period what was the annual management charge and/or rate of cancellation applied to the units purchased during the initial period.
3. During the initial period were 100% of my contributions allocated to purchase units.
4. Please specify the rate at which these initial units are being cancelled today and the current annual management charge levied on these units.
5. Does my policy contain any accumulation units. If so, please specify the annual management charge and/or rate of cancellation applied to the accumulation units
6. Please specify the transfer value and how the charge on a transfer-out is calculated.
7. Does my plan benefit from any future loyalty bonus.

See what response you get before making a formal complaint.