Aegon will cut deferred member charges on the majority of schemes with active member discounts to the active price to meet Government rules on fees for auto-enrolment schemes, although this will mean extra monthly charges for some savers.
The additional monthly charges will apply to current scheme members and will vary depending on the scheme. This comes after the DWP announced plans to ban AMDs for auto-enrolment from April 2016.
For employers who have staged before April 2015, the AMD pricing adjustment will apply to both new and existing members within the timeframe laid out by the DWP.
For employers with a staging date from April 2015, these changes will apply to both new and existing members, from the staging date.
The provider was unable to confirm how many members will be affected by its decision.
The Government will also cap fees for auto-enrolment schemes at 0.75 per cent from April next year, while schemes written on a commission basis will be outlawed in April 2016. Aegon says it will amend its pricing structure to comply with the charge cap in September this year.
In addition, Aegon says it will continue to pay renewal commission until April 2016 for all employers who have staged before April 2015 “at a level which reflects the revised pricing for that scheme”. All other commissions for these schemes will be removed at the point the pricing changes are implemented.
For employers with a staging date from April 2015, all commissions will continue until the staging date and will be removed at that point.
Aegon has seen over 1,000 firms use it to auto-enrol their staff and the insurer says it plans to introduce employer charges for some services, though the firm would not give further details.
Aegon workplace solutions managing director Angela Seymour-Jackson says: “Following the review of our existing pension schemes we can now confidently work with employers and advisers to transition to DWP compliant terms ahead of the deadlines.
“We will achieve this by helping employers engage with their employees for the smoothest transition and an outcome that is in their best interests and providing a proposition that both employers and employees will value.”