Standard Life Pension - Lost group discount, now paying full fees

Turnbull2000

Hi all,

I've been with my current employer for 9 years, and continued to contribute to the Group Flexible Retirement Plan with Standard Life

I had been receiving a 0.45% discount this whole time and on a variety of SL Vanguard funds, but accidentally discovered the discount has recently gone and I'm paying the full 1%+ fees. There was no notice of this, nothing.

My policy plan states:

On the monthly charge date we'll allocate extra units to your plan to reduce the
effect of the fund management charge. We'll work out how many extra units
to allocate to each fund by:
* valuing the flexible account's share of your plan investment in that fund
* multiplying it by 0.45%, and
* dividing this amount by 12
We'll keep applying this discount even if your plan ceases to belong to group
number XXXXX

And for years I've been invested in the following funds with the discount applied, with allocations occasionally varying:

SL Vanguard FTSE UK All Share Index Pension Fund: AMC: 1.0% TER: 1.016%
SL Vanguard FTSE Developed Europe ex UK Pension Fund: AMC: 1.0% TER: 1.016%
SL Vanguard FTSE Developed World ex UK Pension Fund: AMC: 1.0% TER: 1.016%
SL Vanguard Emerging Markets Stock Index Pension Fund: AMC: 1.15% TER: 1.216%

I even transferred in another pension based on the discount and choice of funds.

Standard Life's first response was that discounts are not guaranteed and can be removed at any time, and when I pushed further, the said I'm only entitled to a discount on a limited number Standard Life default funds within this page:

https://www.yourstandardlifepension.com/dpae-drvl/investment-options#charge

Anyone know what the heck is going on? Have SL been incorrectly applying a discount to my non-default fund choices all these years?!

I'm now basically losing a quarter of my yearly contributions in fees.

JoeCrystal

Just to confirm, is this auto enrollment pension scheme? The maximum annual management charge for default auto-enrolment workplace pensions is legally capped at 0.75% of the funds under management if I remember correctly.

Out of interest, what does your employer mention about this? After all, they are the one who set it up originally.

DRS1

I have no idea how it works with SL but the bit you quote says you get some "extra units" in order to give you the discount. Are you still getting those "extra units"?

Another thought is that fees are usually disclosed in annual benefit statements. So what do the latest statements say about fees? Has that changed at all?

dunstonh

The rules were changed some years back so that you could not lose your discount on auto-enrolment schemes if you cease to be an active member.

However, it is not uncommon for the discount to only apply to certain funds. In the worst case scenario, it's typically the default fund only. Often it's just the internal (own brand) funds. Sometimes it may be all of them. There are no hard and fast rules on this, and it is scheme-specific. Often depending on how old the scheme was when it originated.

The auto-enrolment charge cap only applies to the default funds within the pension. It doesn't apply to externally managed funds.

I'm now basically losing a quarter of my yearly contributions in fees.

That is a particularly daft way of looking at contributions and fees. So I wouldn't take any notice of that.

Turnbull2000

https://forums.moneysavingexpert.com/discussion/comment/82075676#Comment_82075676

I'm still on the very same funds that have been receiving a discount for years. The discounts were then removed without notice. Are you suggesting they can just change which funds discounts can be applied to and at any time without telling you?

I don't think it's a daft way of looking at it. My last statement showed around £1300 in fees. I'm now being told it's £2600. It's a huge sum.

Turnbull2000

https://forums.moneysavingexpert.com/discussion/comment/82075649#Comment_82075649

My last statement from April had this:

Costs and charges
Fund management charge £1,216.27
Additional expenses £13.17
Fund transaction costs -£90.14
Total £1,139.30
You benefit from a discount on your charges and we’ve allowed for this in the Fund
management charge shown above.

And until recently, the table below showed a discount for these funds.

QrizB

I don't know how often the charges are applied, or what information you can see on your account, but is there a list of transactions? If there is a list of transactions, have your charges recently increased by a significant amount?

If your transactions show broadly similar periodic charges, could it just be that the app/website has been updated poorly but your discount remains?

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82075741#Comment_82075741

Well you would certainly expect the table at the end to show 0.45% in the column under Discount.

But my first question remains - do you get extra units at all to make up the "discount"? I used to have a pension where when I contributed I had an enhanced allocation rate so if I contributed £100 and the unit price was £1 that £100 contribution bought 105 units. I am wondering if SL are doing something similar here.

Marcon

Anyone know what the heck is going on? Have SL been incorrectly applying a discount to my non-default fund choices all these years?!

Have you asked SL?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82075878#Comment_82075878

From the OP-

Standard Life's first response was that discounts are not guaranteed and can be removed at any time, and when I pushed further, the said I'm only entitled to a discount on a limited number Standard Life default funds within this page:

OP - I continued with a SL pension after that particular employment had stopped, and continued to enjoy the discounts of 0.45%. Confirmed by e mail. Although after a while I realised that new contributions were not being discounted at the same level . I kicked up a fuss and mentioned about low fees at Vanguard etc and the discount was increased to 0.65% for new and old contributions !

Of course my specific pension ( and amount in it) will be different to yours, as like many providers SL pensions have changed over the years ( as has the ownership) . I would say though that their customer service is usually quite good, and probably worth another try at calling them.

Lorian

I continue to get my very valuable company scheme discount with SL through deferment and in draw down. I'm not in default fund.

In the SL app the discounts applying are summarised in view plan details - charges - has the discount gone from there?

I do check this rather often just in case. If it were to disappear I would also be reaching out to the company scheme administrator.