Scottish Widows plans to implement the 0.75 per cent auto-enrolment charge cap for new members this month ahead of a “comprehensive review” of the provider’s existing book of business.
Last month, pensions minister Steve Webb confirmed plans to introduce a 0.75 per cent limit on default fund fees from April 2015.
The announcement has forced providers to look again at the business they have already written and consider how to adjust charges for schemes that risk breaching the cap.
Yesterday, Money Marketing revealed Standard Life would impose a £100 per month “scheme management fee” on small schemes with low average contributions who have already agreed a charge above 0.75 per cent.
Aegon is also considering charging employers directly if the cap means they are no longer “commercially viable”.
Scottish Widows has now revealed it plans to impose the charge cap a year ahead of the April 2015 deadline and review existing auto-enrolment schemes.
Scottish Widows director of corporate propositions David Holton says: “From mid April this year, our maximum charge for new scheme enquiries and new automatic enrolment joiners to our existing customers’ scheme is 0.75 per cent AMC.
“Where we have already quoted charges above 0.75 per cent AMC and these can be amended without impacting the company’s automatic enrolment, we will offer the ability to cap terms at 0.75 per cent AMC.
“The advanced status of automatic enrolment for customers staging in April and May means that this will only impact customers staging in July and later months.
“In the months ahead we will be carrying out a comprehensive review, in partnership with advisers, of our existing portfolio of auto-enrolment schemes.
“This will ensure that any employers who may be impacted by the cap are brought into line with the new rules in time for the DWP’s April 2015 deadline.”