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Standard Life reviews auto-enrol legacy schemes

Steve Webb 480 NAPF 2012

Standard Life is reviewing the suitability of its old pension schemes for automatic enrolment after pensions minister Steve Webb said he would “name and shame” providers who expose savers to “dodgy” legacy schemes.

Speaking at the National Association of Pension Funds conference in Liverpool last week, Webb (pictured) urged providers to follow Aviva’s example and commit not to allow employers to auto-enrol workers into old, high charge pension schemes.

He said: “If we are convinced the market will deliver quality for everyone then we will not need to intervene. Aviva is saying it will not allow employers to automatically enrol their workforce into a dodgy old scheme, it will create a new scheme instead. I want every provider to guarantee not to enrol people into high cost legacy schemes.

“I will name and praise anybody who does it, and name and shame anybody who does not.”

Standard Life head of workplace strategy Jamie Jenkins says: “We have very few, if any schemes, that fall into that category. We are looking at this issue and doing some testing to see if all our schemes are suitable for auto-enrolment, but we have not made any decision on next steps yet.”

Legal & General pensions strategy director Adrian Boulding says Webb is referring to pension schemes with high levels of commission. He says the provider will carefully monitor adviser charges to make sure they are appropriate.

He says: “If we feel it is not good value for the employees, we would take the adviser to one side and say it is not appropriate to use an L&G platform in that way. But frankly I do not see that situation materialising.”

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Comments

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  1. I am glad to see that Standard, unlike Aviva, have not labelled their legacy book as dodgy.

    My problem with this is that why does AE have to shine a light on “dodgy” legacy schemes. Why hasn’t the provider, adviser, client looked at this more closely without being forced? Is it because they are not dodgy……apart from hideous initial commission levels?

    Yes, I accept that some older unitised products are seen as out of step but whilst they may have higher front end charging they do have back end rewards such as extra fund injection that can be very valuable.

    Rant for the day over – have a great weekend everyone.

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