Legal and General is to cap the charges for auto-enrolment pension schemes at 0.5%.
The charge is to cover both the annual management charge (AMC) for administration of a defined contribution (DC) pension and the charge for Legal and General’s default fund, Multi-Asset Lifestyle Portfolio.
Employers, and their employees, that select Legal and General’s auto-enrolment pension scheme and its default fund from 9 September will have a total charge that does not exceed 0.5%.
Existing employer clients will be offered the same deal.
John Pollock, chief executive officer at Legal and General Assurance Society, said: “We have long been advocates of value for money and have avoided opaque charging structures such as active member discounts.
“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 percent a year of their retirement savings pot.”
There’s no doubt that the introduction of automatic enrolment is driving down charges across the private sector. As part of this, Nest’s own charging structure has helped establish 0.5% as a low charge reference point in the market. We welcome moves to reduce charges. It’s vital that members are confident they are getting value for money from the scheme their employer chooses.