Company Pension Fund

wilson1972

Hi all

Ive been part of a company pension scheme since i was 21, during which i have seen myself taken out (and then back in) of SERPS- changes to who runs the pension etc but never really paid much attention to it all. Our company pays a financial advisor a fee, who has put us all into an AVIVA fund.

Now im getting older (46) i am more interested in how my funds are doing, so i took the time to get my login details sorted for aviva online.

The funds are being put in aviva-mixed-investment-40-85-shares-pn-s6


which lists fees as 0.6% according to trustnet.

However aviva classes our pension as 'designer pensions' and charges 0.75%

I know it is only 0.15% difference but is it normal to put funds into a standard fund, call it a designer pension, then charge more?

Is 0.75% a reasonable pension fee?

Our advisor is coming in a few days from now (he comes in once a year), usually we are in and out in 2 minutes flat, and im not sure whether to raise the charges with him

Thanks

dunstonh

The funds are being put in aviva-mixed-investment-40-85-shares-pn-s6

That is the default fund.

which lists fees as 0.6% according to trustnet.

That is the default but not necessarily the charge you are paying.

I know it is only 0.15% difference but is it normal to put funds into a standard fund, call it a designer pension, then charge more?

That fund is available at 1.00% or 1.5% or anything up to that amount.

However, the pension may have fund based discounts as well.

Is 0.75% a reasonable pension fee?

For an auto-enrolment scheme, 0.75% is the capped figure for the default fund.

The same fund is available on their retail pension much cheaper. Indeed, we have one on my desk which is 0.28%.

Our advisor is coming in a few days from now (he comes in once a year), usually we are in and out in 2 minutes flat, and im not sure whether to raise the charges with him

You can raise the charges but its not the adviser that decides. It is the employer as it would require a change to a more modern scheme to get it cheaper and that employer would need to pay the costs of that.

wilson1972

dunstonh thanks so much for the response, it is appreciated a lot!.

If moving to a lower % charge, more modern pension means my employer paying more then i have no chance of it being changed unfortunately.

Im probably worrying about nothing, it was just looking at my annual statements the fees seemed quite high. I already know i need to increase my contributions - but had hoped to get my charges down.

Thanks again.

Brynsam

wilson1972 wrote: »

Im probably worrying about nothing, it was just looking at my annual statements the fees seemed quite high. I already know i need to increase my contributions - but had hoped to get my charges down.

Nothing to stop you opening up a pension scheme of your own with lower charges - you can have more than one. Just make sure you pay enough into the workplace scheme to get as much cash as the employer is willing to contribute (i.e. check that if you pay more to the workplace scheme, will the employer pay more - although from what you say, probably not).

wilson1972

Brynsam: at present 12% of my salary is going into my pension (6% from me, 6% from employer) which is tied into salary sacrifice. But my salary was very low until 5 years ago when i was offered another job which resulted in a fairly big pay rise to keep me from leaving.

Your right, i could increase my contribution to it, but the employer wont increase his.

Ill look into my own separate pot.

You have both been far more useful than the advisor we pay for - thanks

Albermarle

wilson1972 wrote: »

Hi all

Ive been part of a company pension scheme since i was 21, during which i have seen myself taken out (and then back in) of SERPS- changes to who runs the pension etc but never really paid much attention to it all. Our company pays a financial advisor a fee, who has put us all into an AVIVA fund.

Now im getting older (46) i am more interested in how my funds are doing, so i took the time to get my login details sorted for aviva online.

The funds are being put in aviva-mixed-investment-40-85-shares-pn-s6


which lists fees as 0.6% according to trustnet.

However aviva classes our pension as 'designer pensions' and charges 0.75%

I know it is only 0.15% difference but is it normal to put funds into a standard fund, call it a designer pension, then charge more?

Is 0.75% a reasonable pension fee?

Our advisor is coming in a few days from now (he comes in once a year), usually we are in and out in 2 minutes flat, and im not sure whether to raise the charges with him

Thanks

Most pensions have two charges . One for the fund and one for the management and administration of the pension. So just looking at the basic fund charge on Trustnet will not tell you the full story. So for example I have a pension that charges 0.3% for the pension and the three funds are 0.35%; 0.5% and 0.7% , so approx. on average I pay 0.8% overall.

However I also have an Aviva designer pension as well and here it is done differently .I pay 1% for the pension but the main funds , including the default one like you have , are free.So if you are only paying 0.75% overall ( maybe you need to clarify that) I would say that is pretty good.
Interestingly when I worked for the employer with this pension, it also came with free access to a financial advisor. I only ever asked one question and it was 2.5 years and 10 chase up mails before I got to see him.