Paying admin charges for pension when left?

[cgx]

Hi, my son worked in a pub for 4 years, paying in to a Whitbread pension scheme, job finished so does not work for them anymore - they have sent him a letter about his pension worth £2700, but have stated he needs to pay £20 a year admin charges that will be deducted from his account - first thoughts were thats crazy, doesnt work for them anymore how can they charge him, then thought well, staff have to be paid to run the scheme etc - just wondered what the collective thought was - is this reasonable (I'm sure when he does transfer to a another job he will transfer his pension rights and the admin charges will be gone).
I know when I left my LGPS scheme I certainly did not have to pay anything to them to keep the account running...

[500TORQUES]

Sounds fair, usual pension funds take 1% per year.

[Hol]

.

His ex employer and the pension company are typically separate organisations, the latter being paid to provide the scheme.

The fee isn’t unusual.

[Simpo Two]

cgx said:

I know when I left my LGPS scheme I certainly did not have to pay anything to them to keep the account running...

The £2,700 won't just be sitting in a current account, I suspect it will be invested somewhere for growth, and somebody is running those investments.

Maybe with your scheme they took the fee from the investment so you never knew?

[thekingisdead]

Assuming it’s a DC scheme I’d be transferring a pension that small into my current employer scheme, just for ease of admin.

[Countdown]

cgx said:

I know when I left my LGPS scheme I certainly did not have to pay anything to them to keep the account running...

You absolutely definitely did.

There is a fee paid to the Administrators and there will be a fee paid to the Investment Managers.

[The Leaper]

Countdown said:

cgx said:

I know when I left my LGPS scheme I certainly did not have to pay anything to them to keep the account running...

You absolutely definitely did.

There is a fee paid to the Administrators and there will be a fee paid to the Investment Managers.

Likely paid by the employer/sponsoring public body not the members, especially for the DB sections

R.

[Countdown]

The Leaper said:

Countdown said:

cgx said:

I know when I left my LGPS scheme I certainly did not have to pay anything to them to keep the account running...

You absolutely definitely did.

There is a fee paid to the Administrators and there will be a fee paid to the Investment Managers.

Likely paid by the employer/sponsoring public body not the members, especially for the DB sections

R.

It comes out of the same pot. When the Employers and Emlpoyees contributions are paid over to the PF the money goes into the PF's bank account. Payments are made out of this account mainly into the Pension Fund Investments but also for any running costs related to the Scheme. This will include Actuarial advice, Investment Management advice, and legal advice. The payments aren't split between Ers and Ees.

For a Scheme that I'm involved with we pay roughly £600k per annum (£195m AUM). The members wouldn't see any of these charges

[Simpo Two]

Countdown said:

The payments aren't split between Ers and Ees.

You've lost me...

Countdown said:

For a Scheme that I'm involved with we pay roughly £600k per annum (£195m AUM). The members wouldn't see any of these charges

Maybe not but surely they are told about them somewhere?

[Countdown]

Simpo Two said:

Countdown said:

The payments aren't split between Ers and Ees.

You've lost me...

Countdown said:

For a Scheme that I'm involved with we pay roughly £600k per annum (£195m AUM). The members wouldn't see any of these charges

Maybe not but surely they are told about them somewhere?

Sorry - Employers (Ers) and Employees (Ees)

No, because it’s irrelevant to the Employees in a DB Scheme what the management fees are. They have appointed Trustees whose role it is to manage the Scheme on their behalf and ensure that they get the DB pension they have earned. Having said that, if an Employee wanted to know then the Trustees would tell them.

[Countdown]

Just remembered - the fees will be disclosed in the LGPS Annual Report & Accounts which will (or should be) on their website.