Cost was a key concern when holiday company Center Parcs decided to close its trust-based pension scheme and replace it with a group personal pension.
Tim Parker, the company secretary, says: “We wanted to keep cost to a minimum without sacrificing quality of investment. Many of our 6,000 staff are part-time or lower-paid and we didn’t want to overburden them with charges.” With the help of advisers Hargreaves Lansdown, the company picked the Friends Provident personal pension scheme, which offers a choice of more than 100 funds. The default fund is a mixture of Friends Provident and Artemis Global Growth managed funds. Center Parcs subsidises this fund to give an overall charge of 0.72%, while some other options under the scheme have annual charges of more than 1%.
“We expect most employees to opt for the default fund, but it is surprising how many are quite excited by the opportunity to manage their own fund choices,” Parker adds.