Pension moved to new provider without permission

misterthrifty

Hi

I need some advice on my company pension scheme. My employer & I both contribute to the scheme which was run by the same pension company for a few years. I knew they were looking to move the scheme but, out of the blue, I have had a letter from St James Place to say they have taken it over and future contributions will go to them, there was no consultation on this move or advice given on the alternatives. When my employers first started to look at this they were being advised by a pension advisor (associated with St James Place) and it was suggested that he would take 5% of any contributions for his 'advice'.
This all seems very dodgy to me but I don't know what the pension rules are, so any advice would be appreciated.

TIA

ischofie1

Can't comment on the legitimacy of the move but SJP is regarded as possibly the most expensive of pension providers & 5% of imputed money does seem excessive.

xylophone

Have you asked for a meeting with your employer to discuss the matter?

sandsy

This is an official workplace pension under auto-enrolment? Money can't be taken from your contributions to pay the adviser on these contracts unless you explicitly give permission and you are given individual advice. If the employer wants advice, the employer has to pay.

xylophone

If you want to discuss the matter before approaching your employer

https://www.pensionsadvisoryservice.org.uk/

Employer guidance here

http://www.thepensionsregulator.gov.uk/doc-library/automatic-enrolment-detailed-guidance.aspx

jamesd

It seems that your employer may have been fooled into going with one of the most expensive providers around, knowing that it's the employee who will be paying the high SJP charges, not them.

What can't be done is make the employees pay directly for the advice given to the employer but there's so much margin in this that giving the advice away will probably turn out to be profitable.

It's also worth wondering whether your employer has deliberately gone with a poor provider to encourage employees to opt out and save the employer money.

PeacefulWaters

Isn't there a 0.75% charge cap?

sandsy

PeacefulWaters wrote: »

Isn't there a 0.75% charge cap?

Yes, there is although I understand SJP do have a workplace pension within the cap.

Joey_Soap

Sometimes the employer pays the running costs of the scheme. Best to check exactly who is paying what to who, to begin with.