Aviva workplace pension charges

engagedandopen

Just to warn anyone else using Aviva's workplace GPP.

I thought I was paying 1.6% for Aviva's Multi-Manager Flexible fund (0.7% service charge + 0.9% AMC).  I wondered why the OEIC version has an AMC of 0.9% and an OCF of 1.44% while the L&P data on Fundslibrary had 0.0% for extra charges and transaction charges, but I thought it was cheaper to hold the MM Flex fund on my workplace pension than on platform.

Checking again today, the extra cost is now clearly showing 0.9% and 0.59% for extra charges, so the total charge is 0.7% + 1.49% = 2.19% - considerably more than the 1.60% I thought I was paying and even more than their D2C SIPP (1.84% or less).

I do wish their IGC would direct them to sort out the clarity of their charging.  If I benefited from them only charging an extra 0.9% when they meant to charge the OCF 1.44%-1.49%, that's one thing, but it still doesn't make up for the fact they haven't informed customers of charge changes such as on Fundslibrary.  The L&P factsheets have 'total' charges but it isn't clear - as for this fund - where the 1.50% quoted is inclusive of the product service charge, an average charge, or who knows.  When you switch, they don't confirm the charges in the letter they insist on sending out.  It seems to me they need to be clearer on their charges.

dunstonh

Just to warn anyone else using Aviva's workplace GPP.

Which one?  Aviva have several across their legacy companies as well as their current version offered for new business clients.

I thought I was paying 1.6% for Aviva's Multi-Manager Flexible fund (0.7% service charge + 0.9% AMC).  I wondered why the OEIC version has an AMC of 0.9% and an OCF of 1.44% while the L&P data on Fundslibrary had 0.0% for extra charges and transaction charges, but I thought it was cheaper to hold the MM Flex fund on my workplace pension than on platform.

Remember that life & pension funds have a different way of disclosing charges to OEICs/UTs.  And there are 30 versions of this fund across the Life, pensions and UT/OEIC universe (data from FE Fundinfo)

The OEIC share class 1 has an OCF of 1.59% and TC of 0.02% (snapshot 31/12/22)
The OEIC share class 2 has an OCF of 1.44% and TC of 0.02% (snapshot 31/12/22)
The OEIC share class 8 has an OCF of 0.59% and TC of 0.02% (snapshot 31/12/22)
The pension share class S2 has a total cost of 0.90% (AMC 0.60%) not updated since 13/09/2017
The pension share class S6 has a total cost of 0.90% (no AMC quoted) not updated since 13/09/2017
(not bothering with the rest as those are the most common ones)

You shouldnt use AMCs with OEICs as that is an out of date measure and does not compare to AMCs on life & pension funds.

Checking again today, the extra cost is now clearly showing 0.9% and 0.59% for extra charges, so the total charge is 0.7% + 1.49% = 2.19% - considerably more than the 1.60% I thought I was paying and even more than their D2C SIPP (1.84% or less).

Whilst the AMC (for life and pensions) and OCF (for UT/OEICs) wont change much over the years, the transaction charges figure will vary frequently depending on the data in the reporting period (frequently changes quarterly).   It is very common for funds to change from zero to 0.4% back to zero or variations over the quarters.    However, as nobody really takes any notice of the transaction charges figure, its not a problem unless you make it one or don't understand that the figure is synthetic and not an explicit charge.

The L&P factsheets have 'total' charges but it isn't clear - as for this fund - where the 1.50% quoted is inclusive of the product service charge, an average charge, or who knows.  

That is because the factsheet is the default charge and cannot factor in specific terms gained from your company or their advisers or the share class that was utilised.

engagedandopen

Thank you for your detailed reply, Dunston.  It's a "Created for Creatives" "Designer Pension" using Aviva's "My Company" fund range S6.

Aviva charge 0.5% and Hencilla Canworth take 0.2% in commission for 'administration', although they have asked me to use My Aviva, so I have asked Aviva if this commission can be removed as effectively HC aren't doing anything and have asked me to do it all.  I am still waiting for their reply on that.

Aviva did reply about the charge just before the New Year: they promised I am not paying 0.7% + 1.6% and the S6 pricing would be lowered imminently and they were moving to a platform-style charging system in 2024, but the costs would be 1.6% or lower (if they introduced a platform-style charge, they would lower the AMC proportionately).

However, the S2 charge is still +0.9% and the S6 charge, which used to be +0.9%, is still showing +1.49% (0.9% AMC + 0.59% other charges, probably the funds in which the MM fund invests) - it hasn't been imminently lowered back to +0.9%.

It seems strange that HL would be cheaper than this Aviva workplace pension policy for funds like this, and the charging information seems so unreliable.

dunstonh

Aviva charge 0.5% and Hencilla Canworth take 0.2% in commission for 'administration', although they have asked me to use My Aviva, so I have asked Aviva if this commission can be removed as effectively HC aren't doing anything and have asked me to do it all.  I am still waiting for their reply on that.

Commission is normally paid out of the charges.  If it's a fee on top of the provider charge, then it's normally referred to as a fee.    i.e if commission. the fee is 0.50% and the 0.20% comes out of that 0.50%.   

The designer pension with Aviva was a commission based plan.  Not fee based.

Normally when commission is turned off, you don't get the benefit.  Aviva keep it instead.

Aviva did reply about the charge just before the New Year: they promised I am not paying 0.7% + 1.6% and the S6 pricing would be lowered imminently and they were moving to a platform-style charging system in 2024, but the costs would be 1.6% or lower (if they introduced a platform-style charge, they would lower the AMC proportionately).

I would ignore that.    And platform charged systems don't necessarily reduce charges.  It just separates thm.

All the "designer" PPPs I have seen over the years have been 1% or under all in when using internal funds.  So, yours is a strange one.

engagedandopen

In some places they talk about 0.7% with 0.2% commission going to Hencilla Canworth.  But on MyAviva the charge is stated as 0.5% and there are references to 'fund-based commission'.  The annual statement has 0.7%.
The mixed asset and flexible investment-type funds are about 0.75% all-in, but there seem to be very few genuinely internal funds left nowadays - Property and possibly Diversified Assets.  Most of the rest say they have 'External fund holdings'.  Even the Aviva (ex-CU) flexible investment fund is listed on the fund centre under 'ABI Flexible Investment' but its benchmark given on the factsheet is 'IA Flexible Investment'.  Really confusing!

sausage_time

engagedandopen said:

...

Aviva did reply about the charge just before the New Year: they promised I am not paying 0.7% + 1.6% and the S6 pricing would be lowered imminently and they were moving to a platform-style charging system in 2024, but the costs would be 1.6% or lower (if they introduced a platform-style charge, they would lower the AMC proportionately).

...

That's interesting.  My Aviva pension funds are all "Aviva Pensions FUND NAME S6" where FUND NAMEs are the usual suspects.  I wonder if I'll see any reduction in fees/charges.  I keep thinking about moving, but I'd need to sell and I worry about being out of the market while things are generally rising (as they seem to be).

dunstonh

Even the Aviva (ex-CU) flexible investment fund is listed on the fund centre under 'ABI Flexible Investment' but its benchmark given on the factsheet is 'IA Flexible Investment'.  Really confusing!

A fund can have multiple benchmarks under different reporting regimes.
IA = investment association
ABI is the Association of British Insurers.

ABI would only show life funds and pension funds
IA would include OEIC/UT and ETF ranges as well as life funds and pension funds.

IA is the more modern category. ABI is a bit legacy now.

In some places they talk about 0.7% with 0.2% commission going to Hencilla Canworth.  But on MyAviva the charge is stated as 0.5% and there are references to 'fund-based commission'.  The annual statement has 0.7%.

The problem with these legacy plans is that they were not set up to meet current standards.  So, the providers try to shoehorn them into the current methods the best they can.

I had a pension on my books from the early 2000s where I rebated half the ongoing trail commission as a favour to someone (before the days of platform charges)    With the modern disclosures, the provider decided to refer to it as an adviser fee (which it was not) and didn't factor in the rebate even though they were handling the rebate.   Their charging disclosure software wasn't built for legacy plans or they didn't include rebates as the people building them were basing it on their new business plans only.

0.7% with 0.2% commission would suggest 0.7% charge and 0.2% of that goes to the firm.  
If you were still in contact with the firm, they could generate a document on the Aviva website that puts the charges in a clean layout.   

sausage_time

sausage_time said:

engagedandopen said:

...

Aviva did reply about the charge just before the New Year: they promised I am not paying 0.7% + 1.6% and the S6 pricing would be lowered imminently and they were moving to a platform-style charging system in 2024, but the costs would be 1.6% or lower (if they introduced a platform-style charge, they would lower the AMC proportionately).

...

That's interesting.  My Aviva pension funds are all "Aviva Pensions FUND NAME S6" where FUND NAMEs are the usual suspects.  I wonder if I'll see any reduction in fees/charges.  I keep thinking about moving, but I'd need to sell and I worry about being out of the market while things are generally rising (as they seem to be).

I called Aviva but they could not tell me any more information about this (or even confirm if change is in the air).  Anyone heard anything more about it?

engagedandopen

Aviva are now adamant that I am only paying 0.5% base yearly fee, not 0.7%, and that I have never paid commission to Hencilla Canworth.  This despite my showing them how it says 0.7% charge on the initial policy document and my annual statement (they just say that's incorrect - their legal documents are incorrect).

Apparently the fund fact sheet was in correct and I am actually paying 0.5% + 0.23% (extra fund charge) + 0.53% (fund manager extra expenses), so about 1.26% all-in rather than the 1.60% it used to be.

That compares reasonably with Aegon's Growth Plus Select Portfolio (0.98% all-in, currently managed by Aon), and Standard Life's abrdn Myfolio Multi-Manager V on their AMPP product (1.54% or lower).  However, I think Jupiter Merlin Growth on my Aviva Pension (SIPP) has performed best of all lately!