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Standard Life hits small firms with £1,200 fee following charge cap

Standard Life will impose a £1,200 annual fee on small employers which have agreed auto-enrolment terms with the provider above the 0.75 per cent charge cap.

Last month, pensions minister Steve Webb confirmed that any scheme with a charge above 0.75 per cent would not be eligible for auto-enrolment from April 2015. Also 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 levy a £100 per month “scheme management fee” on plans with fewer than 50 members and average contributions below £150 per month. This will allow Standard to reduce its charge below the 0.75 per cent cap.

Standard Life head of workplace strategy Jamie Jenkins says: “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 emp-loyer administration services.”

Aegon is also considering imposing employer levies for schemes with charges above the cap. 

A company spokesman says: “The cap creates a challenge for the ind-ustry of achieving commercially via-ble charges for small or low contribution schemes. Levying a charge on employers is one way of addressing this. 

“We consider pricing on a case-by-case basis.”


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