Employer contributions to SIPPs

epicurate

I have looked further into this and the comment that rings true of all the above is jimjames saying how opaque it all is. I think it must be right that if a pension scheme is being handed lots of customers on a plate (many of them green on these sorts of issues) there's little incentive to make it easy to get info. Most people I expect will just allow money to rack up in the default fund. Aegon don't get paid extra to provide a good service, and for most employees like me the deal being offered by our employer makes it completely uneconomic to turn down the employer scheme. Skewed incentives all round.

From what I've gathered I think (but it will take a phone call to clarify) that the 1% standard charges referred to on practically all of their fund fact sheets is a red herring. I think this is referring to the platform charge, not the fund charge as such. The printed literature I got when I joined the scheme says that the platform charge my employer has negotiated is 0.5%, which I THINK overrides this 1%. It doesn't say "platform charge" as such - all the language is different to what I'm used to having arranged my own SIPP and S&S ISA - so I'm reading between the lines. Then some of their funds have an additional fund manager charge (i.e. the actual fund charge?) but a lot are nil. I have found a few trackers with nil additional charges, so it looks like my overall costs on these are 0.5%. But I really can't be sure on that despite looking long and hard at the website and the brochures (which seem to conflict often). Also, it doesn't seem right that the fund charge be nil. A fund has to have SOME expenses! And presumably these days they're not allowed kickbacks from the platform.

All in all a complete mess. I would much prefer to manage my own. Sobryma: no, I don't have access to the Aegon SIPP option, so a lot of the funds seem to be weird white labelled funds provided by some of the big managers. Vanguard sadly absent.

I may still push for my employer to start offering the SIPP option. I appreciate it may involve changing the payroll system a bit, but once that's done is there that much additional work? It's a relatively small employer and prides itself on being a really good employer, so I think it's time I tested that (although I gather that many people on this thread think I'm being an unreasonable t*t for doing so!). However, from my further investigations, I suspect I can live with the Aegon scheme if I have to. Thanks all.

jimjames

I certainly don't think you're unreasonable by pushing, I'd done the same with my employer but with nearly 1000 staff I can see the administration problem.

My sipp is with HL and at first glance it seemed that was cheaper but I thought that can't be right! Now it does appear as per your example where the fund charge is the platform fee unless there is an extra bit added but I'm still waiting to hear. Even hr couldn't answer the question!

gadgetmind

epicurate wrote: »

Most people I expect will just allow money to rack up in the default fund.

Yes, typically 80%+ of people do exactly this and they never so much as look at the choice of funds or the fees.

From what I've gathered I think (but it will take a phone call to clarify) that the 1% standard charges referred to on practically all of their fund fact sheets is a red herring. I think this is referring to the platform charge, not the fund charge as such.

It's typically an "indicative charge" and pretty much everyone will have negotiated something better.

The printed literature I got when I joined the scheme says that the platform charge my employer has negotiated is 0.5%, which I THINK overrides this 1%. It doesn't say "platform charge" as such - all the language is different to what I'm used to having arranged my own SIPP and S&S ISA - so I'm reading between the lines. Then some of their funds have an additional fund manager charge (i.e. the actual fund charge?) but a lot are nil. I have found a few trackers with nil additional charges, so it looks like my overall costs on these are 0.5%. But I really can't be sure on that despite looking long and hard at the website and the brochures (which seem to conflict often). Also, it doesn't seem right that the fund charge be nil. A fund has to have SOME expenses! And presumably these days they're not allowed kickbacks from the platform.

These are what's called "internal funds" and the 0.5% is the total charge, effectively TER+platform.

a lot of the funds seem to be weird white labelled funds provided by some of the big managers. Vanguard sadly absent.

Most people want all-in-one portfolio funds, so you typically see a lot of these plus some "components" including trackers for those who want to get fancy.

However, from my further investigations, I suspect I can live with the Aegon scheme if I have to.

That's the conclusion I came to with my FL GPP. I'm benchmarking my "fancy pants" Vanguard SIPP against the FL Balanced Index Enhanced FoF and so far can see little reason to favour one over the other.

dunstonh

The printed literature I got when I joined the scheme says that the platform charge my employer has negotiated is 0.5%, which I THINK overrides this 1%.

So, most of the internal funds and trackers have an ongoing charge of 0.5%

Then some of their funds have an additional fund manager charge (i.e. the actual fund charge?) but a lot are nil.

External funds would have an additional charge to the base 0.5%.

Also, it doesn't seem right that the fund charge be nil.

It isnt nil. it is 0.5%.

I may still push for my employer to start offering the SIPP option.

How much do the trackers you want cost on your platform plus the platform charge? (funds priced with the OCF please as that compares with pension AMC)

Chances are that its cheaper with the Aegon plan or at least nothing in it.

Vanguard sadly absent.

Not if the existing options are better value or even offer better returns. Some of the providers internal multi-asset funds return equally as good or better returns than the VLS.

epicurate

Dunstonh: if I could confidently compare the two, like for like, I would be a much happier bunny.

For example, my literature tells me that this fund carries no additional charge

http://www.aegonse.co.uk/funds/downloads/client-pen-globalequitytracker.pdf

So that's the flat 0.5% then, all in? But then you look and see that it's a fund of funds, managed by Blackrock. And a lot of those component funds have TER of 0.2%-0.3%. Is that in addition to, or inclusive of, that 0.5% figure I've been given? Even if I ring up Aegon and they give me an answer, I don't know how I would begin to verify that answer.

As I say, very opaque. Whereas when I buy funds myself in my own SIPP I feel like the information presented is actually pretty clear and I know what I'm getting.


IF it's 0.5% all-in then I admit that doesn't seem very much, but since I'm more or less maxed out on my platform fees with Youinvest it's inefficient to be paying that sort of fee when most of the funds I want have sub-0.25% TER and the marginal platform costs in my SIPP are negligible. By no means the end of the world, but cutting fees to the bone is my mantra these days. Which makes it all the more amusing that when I first posted on this board I was accused of being a shill for Nutmeg, and my first post deleted as spam. Ho ho ho.

dunstonh

For example, my literature tells me that this fund carries no additional charge

http://www.aegonse.co.uk/funds/downl...itytracker.pdf

So that's the flat 0.5% then, all in?

Yes. Pension funds charges equate to the TER/OCF on unit trust/OEICs.

But then you look and see that it's a fund of funds, managed by Blackrock. And a lot of those component funds have TER of 0.2%-0.3%. Is that in addition to, or inclusive of, that 0.5% figure I've been given?

Those may be the charges that a retail consumer may pay if they bought those funds themselves but they are not the charges a fund of funds would pay. They are not incremental either. They are part of the 0.5% figure.

As I say, very opaque. Whereas when I buy funds myself in my own SIPP I feel like the information presented is actually pretty clear and I know what I'm getting.

Absolutely no different to the SIPP. Indeed, the SIPP could be far more complicated and run many more levels of charges. The Aegon scheme has two charges. A base charge and an additional charge for certain funds. The Youinvest SIPP has two pages of different charges. Aegon is a doddle in comparison.

Which makes it all the more amusing that when I first posted on this board I was accused of being a shill for Nutmeg, and my first post deleted as spam. Ho ho ho.

That company have spammed here before. So, new posters singing their praises (when actually they dont offer much that is value) are often deleted.