Double-checking Pension Fees

dont_use_vistaprint

Hi, my pension provider charges 0.39% of the total value with no other fees. These fees are calculated monthly and then reported annually on the statement as a single amount.

When I divide last year‘s fees by the fund value as shown on the last statement, I get 0.47%.

I know this method isn’t precise because they calculate it monthly but considering the fund value has grown significantly. I would expect my figure to be slightly less than 0.39%.

Am I missing something or can you think of any valid reasons? I’ve checked the statement and there are no other fees applicable other than very small transaction costs (0.07%) for buying units, that are already reflected in the funds value, Plus, I didn’t  buy any units in the statement period anyway.

dunstonh

When I divide last year‘s fees by the fund value as shown on the last statement, I get 0.47%.

As to be expected.   You tend to find that method will either push the percentage up or down depending on the returns over the year.

With a rising value you would expect that method to be under the 0.39%.   With a falling value (either returns or withdrawals) you would expect it to be above that value.

Hi, my pension provider charges 0.39% of the total value with no other fees.

With the EU disclosure requirements, the charges are often discussed between the explicit (AMC or OCF) plus implicit (TC - transaction charges).    TC can add 0.01 to 0.2% p.a. to the charges disclosure.   Your comment indicates 0.07%.   Most experienced investors disregard TC because of its flaws and not being an explicit charge.   However, providers are required to disclose them.   So, if you put 0.07 on your 0.39 then you are in the ballpark of 0.47.

Plus, I didn’t  buy any units in the statement period anyway.

TC is not linked to buying units.   TC is a synthetic figure to indicate your share of the costs for running the fund that are not included in the OCF (if UT/OEICs) or AMC (if pension  or life funds).

tacpot12

dont_use_vistaprint said:

Hi, my pension provider charges 0.39% of the total value with no other fees. ...

I'm suprised there are no other fees. Have you checked carefully that there is not some sort of platform fee or account fee that you missed. If not, then 0.39% to 0.47% is good. (I pay 0.44% fees across a broad portfolio of funds and this includes a platform fee). 

squirrelpie

Why not ask your provider for a detailed/breakdown/explanation of the charges? Surely they'll know better than a bunch of people on the Internet.

Marcon

squirrelpie said:

Why not ask your provider for a detailed/breakdown/explanation of the charges? Surely they'll know better than a bunch of people on the Internet.

Some people in the bunch will know the answer and be able to explain it eg

dunstonh said:

When I divide last year‘s fees by the fund value as shown on the last statement, I get 0.47%.

As to be expected.   You tend to find that method will either push the percentage up or down depending on the returns over the year.

With a rising value you would expect that method to be under the 0.39%.   With a falling value (either returns or withdrawals) you would expect it to be above that value.

Hi, my pension provider charges 0.39% of the total value with no other fees.

With the EU disclosure requirements, the charges are often discussed between the explicit (AMC or OCF) plus implicit (TC - transaction charges).    TC can add 0.01 to 0.2% p.a. to the charges disclosure.   Your comment indicates 0.07%.   Most experienced investors disregard TC because of its flaws and not being an explicit charge.   However, providers are required to disclose them.   So, if you put 0.07 on your 0.39 then you are in the ballpark of 0.47.

Plus, I didn’t  buy any units in the statement period anyway.

TC is not linked to buying units.   TC is a synthetic figure to indicate your share of the costs for running the fund that are not included in the OCF (if UT/OEICs) or AMC (if pension  or life funds).

It's not rocket science if you work in the industry, but it can be utterly baffling if you don't!

dunstonh

Marcon said:

squirrelpie said:

Why not ask your provider for a detailed/breakdown/explanation of the charges? Surely they'll know better than a bunch of people on the Internet.

Some people in the bunch will know the answer and be able to explain it eg

dunstonh said:

When I divide last year‘s fees by the fund value as shown on the last statement, I get 0.47%.

As to be expected.   You tend to find that method will either push the percentage up or down depending on the returns over the year.

With a rising value you would expect that method to be under the 0.39%.   With a falling value (either returns or withdrawals) you would expect it to be above that value.

Hi, my pension provider charges 0.39% of the total value with no other fees.

With the EU disclosure requirements, the charges are often discussed between the explicit (AMC or OCF) plus implicit (TC - transaction charges).    TC can add 0.01 to 0.2% p.a. to the charges disclosure.   Your comment indicates 0.07%.   Most experienced investors disregard TC because of its flaws and not being an explicit charge.   However, providers are required to disclose them.   So, if you put 0.07 on your 0.39 then you are in the ballpark of 0.47.

Plus, I didn’t  buy any units in the statement period anyway.

TC is not linked to buying units.   TC is a synthetic figure to indicate your share of the costs for running the fund that are not included in the OCF (if UT/OEICs) or AMC (if pension  or life funds).

It's not rocket science if you work in the industry, but it can be utterly baffling if you don't!

The EU directive on disclosures certainly made it more complex, and the fact that they allow fund houses to use a range of calculation methods that result in different outcomes without requiring the fund house to say what method they use is ridiculous.

dont_use_vistaprint

dunstonh said:

When I divide last year‘s fees by the fund value as shown on the last statement, I get 0.47%.

As to be expected.   You tend to find that method will either push the percentage up or down depending on the returns over the year.

With a rising value you would expect that method to be under the 0.39%.   With a falling value (either returns or withdrawals) you would expect it to be above that value.

Hi, my pension provider charges 0.39% of the total value with no other fees.

With the EU disclosure requirements, the charges are often discussed between the explicit (AMC or OCF) plus implicit (TC - transaction charges).    TC can add 0.01 to 0.2% p.a. to the charges disclosure.   Your comment indicates 0.07%.   Most experienced investors disregard TC because of its flaws and not being an explicit charge.   However, providers are required to disclose them.   So, if you put 0.07 on your 0.39 then you are in the ballpark of 0.47.

Plus, I didn’t  buy any units in the statement period anyway.

TC is not linked to buying units.   TC is a synthetic figure to indicate your share of the costs for running the fund that are not included in the OCF (if UT/OEICs) or AMC (if pension  or life funds).

The fund grew 16.4% and way the TC are described on the statement  it’s  already accounted for in the fund value and not an extra cost.

if it is 0.39 + 0.07 then the wording on the statement is very misleading.


Ive requested a breakdown of fees  

dont_use_vistaprint

tacpot12 said:

dont_use_vistaprint said:

Hi, my pension provider charges 0.39% of the total value with no other fees. ...

I'm suprised there are no other fees. Have you checked carefully that there is not some sort of platform fee or account fee that you missed. If not, then 0.39% to 0.47% is good. (I pay 0.44% fees across a broad portfolio of funds and this includes a platform fee). 

Yes I checked this on docs and speaking to them, the two funds that are invested in  have no underlying fees. They are the default on auto enrol rated 7 out of seven and 4 out of 7 there are other funds I can choose from that do attract fees but this would take it out of the full fully managed state. if I do this then they will be charged for advice and administration on Tope. I took a lot of advice on this from different people &  everyone says to leave this pension alone it is very cheap and performing very well.

it was an employers pension , a very large listed company who picked the funds  so maybe they did a good deal. It’s fully managed, performs very well & great support.

When I was looking to combine recently I found another pension from another employer had fees of  0.79, awful support and bad performance 

i’m happy with the product the company and the fees. I just want to  understand how this number was arrived at

Linton

Quoted % values like charges or yield are based on last year’s actuals and current value. So charges may show significant volatility from changes in price rather than any variation in money taken by the manager. The manager probably won’t sack people just because there has been a crash.