LEGAL & GENERAL CAPS WORKPLACE PENSION CHARGES AT 50bps.
09 September 2013
Capped charge for all workplace pension customers…
Legal & General is capping charges for auto enrolment (AE) Workplace Pensions at 50bps for investments in insured funds. The single charge covers both the annual management charge for administration of the pension (AMC) and the fund charge (FMC) for the Legal & General Default investment.
Legal & General has taken the decision to cap the rate of charges on its Defined Contribution (DC) pension because we strongly believe that having value for money, well governed corporate pension products and transparent charges is the right way to ensure better member outcomes at retirement.
Effective today, any new customer choosing a Legal & General AE workplace pension plan and investing in our default fund, the Legal & General Multi Asset Lifestyle Profile, will have a total charge not exceeding 50bps.
Existing Legal & General DC pension customers will be offered the same deal.
Value for money:
Commenting on this announcement John Pollock, Chief Executive Officer Legal & General Assurance Society said; “We have long been advocates of value for money and have avoided opaque charging structures such as active member discounts.
This commitment will give our customers confidence in selecting Legal & General as their provider for Automatic Enrolment.
Ahead of the Government’s forthcoming consultation on maximum charges for auto-enrolment schemes, we have made our position clear that no employees saving in a workplace pension scheme should have to pay more than half a per cent a year of their retirement savings pot.
In May we established IGO our independent governance oversight committee for contract based DC pensions, with Paul Trickett as its independent chairman, giving these customers the best regulatory regime currently available.
Together these initiatives ensure independent monitoring, value for money and top quality service is available across the board for all our customers.”
This initiative is well timed to coincide with the start of the AE staging schedule for small to medium sized employers (SMEs) in mid-2014.
These employers can be reassured that when they make their decision about which pension provider they should choose for their workplace, Legal & General pensions offer value for money for their employees with charges capped at 0.5% a year.
Millions of staff will be signed up to a company pension scheme for the first time as a result of AE and they need charges that are transparent, comparable and fair.
Employers and their staff can have confidence that the Legal & General DC scheme, whether trust-based or contract-based, will provide good value for money and lead to better outcomes for savers at retirement.
Notes to editors
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
1) Independent scheme governance:
In May this year Legal & General’s independent chairman of its WorkSave Mastertrust, Paul Trickett, unveiled Legal & General's IGO initiative (Independent Governance Oversight ), which extended independent trustee style governance to strengthen governance of contract based workplace pensions for its clients. IGO will help deliver better outcomes to members of Legal & General’s contract schemes and further raise the bar of contract governance as a whole.
2) Workplace Savings:
We currently operate and administer approximately 3,600 schemes for the benefit of over 750,000 members with total funds in excess of £8 billion.
We administer Mastertrusts for Marks & Spencer, Sainsbury's, Debenhams, Mothercare, Ikea, Halfords, Pets at Home, Ladbrokes, Arcadia, and Carnival P&O among others.
We also administer contract based pension scheme for a wide range of employers including Alliance Boots, Barclays, SERCO and Thales Group.
3) Legal & General Group plc:
Established in 1836, Legal & General is a leading provider of protection, annuities, savings and investment management products in the UK, with a market capitalisation of £10bn (as at 22 March 2013). The Group has 7 million retail customers in the UK for life assurance, pensions, investments and general insurance plans. Our investment management business, Legal & General Investment Management, is responsible for investing £406bn worldwide on behalf of investors, policyholders and shareholders. Following the acquisition of Cofunds the Legal & General Savings division AUA exceeded £103bn (based on AUA at 31 December 2012). Legal & General Assurance Society provides a range of retail savings funds and savings structures to individuals and workplace clients.
For more information please contact:
About Legal & General
Legal & General Assurance Society Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 166055.