Understanding Scottish Widows Pension Management Charges

P1Fanatic

I have a workplace pension through my employer managed by Scottish Widows. I've never really looked at the fees but was on the SW website looking at "Unit History" and each month see an entry listed as "Investment Type = AMC Adj". I assume this means Annual Management Charge Adjustment which is them selling some of my units to cover their charges. Which is all straightforward. However I don't really understand the amounts. The Policy lists the AMC as 0.300% and my most recent payment was for £268 on a Pension Value of £459716.61 on the date it was taken. By my rudimentary maths thats £1379pa or £114.93 pm so less than half of what was taken. I am likely missing something obvious or using the wrong calculation. But before I email them to enquire maybe someone can tell me what I am missing?

Thanks in advance.

Albermarle

Probably the AMC is made up of a platform/management charge, which is the one you see. + a fund charge which you do not see as it is paid within the fund but the total charge of 0.3% is visible to you.
Presume you only have one fund ?
By the way, if I am right that is pretty cheap !  SW tend to be cheap but with poor website/service.

P1Fanatic

Albermarle said:

Probably the AMC is made up of a platform/management charge, which is the one you see. + a fund charge which you do not see as it is paid within the fund but the total charge of 0.3% is visible to you.
Presume you only have one fund ?
By the way, if I am right that is pretty cheap !  SW tend to be cheap but with poor website/service.

Yes just one fund. AMC is low but probably due to size of company account. I forgot we have a pension mgmt company who front end our pension so I will contact them. You are probably right and I dont think anything is amiss but I’d like to understand it now I have seen it.

Albermarle

Now you have started to look at the pension, it would be a good idea to look at what the fund is where your money is, if you have not done already.
If you have never chosen an investment, it will be in a default fund, which may or may not be the best for you. It might be in a lifestyle fund, that changes as you get older, again it may or may not be the best for you. Having the right fund is more important than small differences in charges.

P1Fanatic

Fyi I spoke to SW. I misread the AMC Adj was actually a credit rather than a debit. Essentially the fund I am in has a standard AMC of 1% but my employer gets a 0.7% discount. So the fund charge stays the same but every month they credit 0.7% of it back. Seems a bit convoluted and complicated.

dunstonh

Seems a bit convoluted and complicated.

Or looking at it another way, it seems logical and transparent.

Default charge of 1% collected within the fund (the normal way for SW).  So, any reduction in charge has to be credited explicitly

P1Fanatic

Albermarle said:

Now you have started to look at the pension, it would be a good idea to look at what the fund is where your money is, if you have not done already.
If you have never chosen an investment, it will be in a default fund, which may or may not be the best for you. It might be in a lifestyle fund, that changes as you get older, again it may or may not be the best for you. Having the right fund is more important than small differences in charges.

I just went with the middle of the road risk level that was Pens Portfolio Two (Three being more cautious and One being more risky). You can of course pick from a multitude of other funds they offer but its so difficult to know which is "better". Pens Two has done pretty well for me tbh other than this year where most funds have taken a hit. So I am not overly concerned on its performance but I would like to see how its performed over the last 10 years say compared to One and Three but I cant seem to find it SW own pension funds site (some that sound very similar but not quite the same). Is there a 3rd party resource that is better for this type of research?

Albermarle

Is there a 3rd party resource that is better for this type of research?

Trustnet

Scottish Widows Pension Portfolio Two Pension Series 2 Fund factsheet | Trustnet

P1Fanatic

Thanks. The Series 2 part made me think it was a different fund.

intalex

I have a related question- I also have pens portfolio two and see a monthly credit titled “AMC adj” of approx 0.05% of the principal units. I’ve had this pot for about 8 years but as of now I don’t see any debits in there for the actual AMC - not sure if the credits are some kind of monthly “earnings” from the fund net of a monthly AMC perhaps?

dunstonh

intalex said:

I have a related question- I also have pens portfolio two and see a monthly credit titled “AMC adj” of approx 0.05% of the principal units. I’ve had this pot for about 8 years but as of now I don’t see any debits in there for the actual AMC - not sure if the credits are some kind of monthly “earnings” from the fund net of a monthly AMC perhaps?

Many of SW's plans sell units to pay the charges.   So, they would sell only what is needed to meet the net charge.

are you sure the adjustment is a positive and not a negative.  Normally, the default is the maximum and adjustments are downwards.