Standard Life will impose a £1,200 a year fee on small employers who have agreed auto-enrolment terms with the provider above the 0.75 per cent charge cap.
Last month, pensions minister Steve Webb confirmed any scheme with a charge above 0.75 per cent would not be eligible for auto-enrolment from April 2015.
In March, Standard Life chief executive Paul Matthews warned employers they could have to pay extra pension fees as a result of the cap.
The provider has now confirmed it will 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.
Standard Life managing director, adviser and workplace Barry O’Dwyer says: “If the terms of your scheme are currently higher than 0.75 per cent, Standard Life will reduce the member charge to be no more than 0.75 per cent in time for April 2015.
“For larger schemes, meaning schemes with 50 or more employees and at least £150pm average contributions (after allowing for minimum step ups in 2018) Standard Life will bear the cost of the reduction in charge.
“For smaller schemes, meaning all other schemes that meet our standard criteria, a scheme management fee will be introduced at the same time as the reduction in member charge.
“If a scheme management fee applies, it will be £100 per month. We will notify you at least three months in advance of its commencement and we won’t require any further action from you.”
Standard Life head of workplace strategy Jamie Jenkins adds: “We have been considering ways of sharing the cost of providing the pension scheme between the employee and employer, while mitigating any cross-subsidy between schemes. This will result in us asking some employers to pay separately for employer administration services.”
Aegon is also considering imposing employer levies for schemes with charges above 0.75 per cent.
An Aegon spokesman says: “Aegon wants to support as many employers as possible with auto-enrolment and to help their employees get ready for retirement.
“The cap creates a challenge for the industry of achieving commercially viable charges for small or low contribution schemes. Levying a charge on employers is one way of addressing this.
“We consider scheme pricing on a case-by-case basis.”