Standard Life Pension Charges

Chickereeeee

While I have SIPPS amd ISA's etc, I also have a pension with Standard Life, invested in a number of their funds (self selected).

Now, although SL have an AMC and there is a 'discount' on this, set up when the pension account was started (2003 or so), there have not been any changes since. Did the recent unbundling of charges not apply in this case? For example, they still charge e.g. 1.3% for SLI UK Smaller Companies.

Thanks

dunstonh

Did the recent unbundling of charges not apply in this case?

No. Unbundling applied to unit trusts/oeics. Pension funds cannot be unbundled as by definition they are issued by a life assurer. (not to be confused with pensions offering unit trusts/oeics which would be unbundled).

they still charge e.g. 1.3% for SLI UK Smaller Companies.

Which is 0.89% in UT unbundled form and 1.69% in bundled UT form.

Chickereeeee

Thanks, that is what I guessed, Dunstonh.

Life assurance companies like SL offer lists of funds funds that look very like their OEIC counterpart: eg SL Assurance Fidelity Special Situations Pension Fund etc. I assumed the underlying fund was the same, but in a 'pension fund wrapper'

Hence, a personal pension consisting of a self-selected collection of the above pension funds looks very like a SIPP to me.

Is there something subtle going on that makes them eligible for a different regulatory regime?

dunstonh

Life assurance companies like SL offer lists of funds funds that look very like their OEIC counterpart: eg SL Assurance Fidelity Special Situations Pension Fund etc. I assumed the underlying fund was the same, but in a 'pension fund wrapper'

They are mirror funds. However, they are the life assurance companies version of that fund.

Hence, a personal pension consisting of a self-selected collection of the above pension funds looks very like a SIPP to me.

No. Quite different. Its a different type of investment fund in a different funds universe. An insured pension fund may invest into the main UT/OEIC fund as a sub fund or it may mirror the investment decisions (but possibly not in sync with the main fund) but it is not the main UT/OEIC fund.

Is there something subtle going on that makes them eligible for a different regulatory regime?

Yes. They are insured pension funds designed to be used on insured contracts. Not UT/OEICs. THey didnt need unbundling as they never had trail commission on them and as they are issued by the distributor insurer only, it is their fund. Not the fund house they are mirroring.

Chickereeeee

dunstonh wrote: »

They are insured pension funds designed to be used on insured contracts.

OK, so what benefit to me is the fact that they are 'insured'? I understand that company contributions can only be made to a FSA approved provider, which has approved pension funds. As an individual/self employed person is there any substantive benefit?

Previously the lower fund charges in a PPP may have balanced the lack of transparency, lack of choice, fund performance data etc, but with unbundling and low cost SIPPs, is there any reason not to transfer to the latter?

dunstonh

OK, so what benefit to me is the fact that they are 'insured'?

No advantage or disadvantage.

As an individual/self employed person is there any substantive benefit?

its a non-issue.

Previously the lower fund charges in a PPP may have balanced the lack of transparency, lack of choice, fund performance data etc, but with unbundling and low cost SIPPs, is there any reason not to transfer to the latter?

Depends on what you transfer them to and who you use. Some PPPs also have fund based discounts (some Std Life plans have these). So, they also need to be considered if applicable.

Chickereeeee

Thank you Dunstonh. As ever, quick, accurate and courteous replies to dumb questions.

You confirm my thoughts, although I had not realised the fund 'mirrors' could be so different from the UT/OEIC. To me, mirror means 'exact copy'. I can do without yet another layer of obfuscation.

My plan was to transfer the PP to a SIPP provider when the unbundling fuss has died down, which I will stick with.