AIG Life is cutting the annual management charge on its personal pension funds to 1 per cent from 1.1 per cent.
The move takes immediate effect and applies to both new and existing policyholders.
It means AIG now has two versions of the Personal Pension Bond with one version being compliant in terms of charging structure with the Government's stakeholder proposals.
Its investment marketing director Nigel Hewett says: "The across-the-board reduction in AMC allows us to confirm our support for existing clients and also to attract new business in a competitive sector.
"As stakeholder develops we will continue to seek to be at the forefront of product design and administration."