Charge Cap And Commission Changes
Monday, July 14, 2014
Following the Department of Work & Pension’s announcement in March 2014 that a default fund charge cap of 0.75% will be enforced on workplace pensions, and financial adviser commission and consultancy charging banned, Royal London is today setting out how it will implement these changes.
Existing ‘Retirement Solutions’ workplace pension schemes - currently branded Scottish Life - will be re-priced to a market competitive level within the cap, and consultancy charges removed. These changes will happen on 1 April 2015 or, if it occurs later, at the point of the employer’s ‘staging date’.
It will also be removing commission and introducing adviser charging options. These changes will happen on 1 April 2016 or, if it occurs later, at the point of the employer’s ‘staging date’.
Commenting on the changes, Isobel Langton, CEO of Royal London Intermediary said
“These changes are driven by new legislation, which we need to make for our proposition to remain compliant. We looked closely at whether or not we should remove commission from April 2015, but have decided that the best way forward is to continue to pay commission until April 2016. This allows advisers more time to integrate these changes into their business models and highlights our support of the intermediary market.”
Full details of the changes: www.scottishlife.co.uk/scotlife/web/site/Adviser/1407ChargeCap.asp
NOTES TO EDITORS:
- An employer’s ‘staging date’ is when its automatic enrolment duties come into force, and is based on the total number of people in its PAYE scheme.
For further information please contact:
Gareth Evans, Head of Corporate Affairs, 020 7 506 6715 or 07919 170069
About Royal London:
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £76.2 billion. Group businesses serve around 5.3 million customers and employ 2,900 people. (Figures quoted are as at 31 March 2014). Over the next two years the Group is moving to operate all of its UK life, pension and investment business under a new version of the Royal London brand. Royal London Asset Management is now under the new master-brand and the Scottish Life, Scottish Provident and Bright Grey brands will migrate over the next 18 months.