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AMCs of up to 9% on occupational schemes

Some employers and scheme members are being hit with charges of up to 9 per cent on occupational plans, a Department for Work and Pensions report reveals.

The report on charging levels and structures in money-purchase schemes, published last week, shows that two trust-based occupational schemes have AMCs of between 5 per cent and 9 per cent. This is up to six times the maximum stakeholder charge.

Three schemes have AMCs of 4-5 per cent, two have AMCs of 3-4 per cent, another two have AMCs of 2-3 per cent and 12 have AMCs of 1-2 per cent.

The vast majority of contract-based schemes have an AMC of less than 1.5 per cent. The DWP found charges were paid by the employer in 42 per cent of cases while employees paid the costs in 19 per cent of schemes. In 35 per cent of cases, the scheme charge was shared.

Standard Life head of pensions policy John Lawson says: “Some employers and scheme members are paying extortionate charges. They need to find a more cost-effective alternative.”

Hargreaves Lansdown pensions analyst Laith Khalaf says: “You can see how charges on occupational schemes rack up because they need to pay trustees, investment managers, actuaries and advisers rather than buying an off-the-shelf group personal pension.”


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  1. An AMC’s of 9% is the market telling the regulators the “true” cost of all the regulatory impositions heaped upon them over recent years.

    What they are really saying is the regulatory costs have priced the product out of the market. To be quite frank if you applied true costs of selling any regulated product you would find that the commission earnings is dwarfed by the true cost.

    Consider this: What charge would you make to be “outlawed” from your human rights, the same rights that others have died and are defending? What charge would you make to be subjected to unlimited litigation administered by and unelected quasi judicial quango the FSA/FOS who do not grant you protection under the rule of law. If you were able to cost this and many other factors I can guarantee you the quoted 9% would not be unreasonable and that market forces are recording the true cost of UK regulation!

    This is the uninversal law of business and why the final salary pension industry is being killed off by regulations quicker than you can say Robert Maxwell!


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