The changes announced today will provide advisers and employers with the clarity they require in order to understand the full implications for their corporate pension schemes, enabling them to continue to achieve the best possible outcomes for employees. The pricing structures of schemes have been developed to be as fair as possible, removing costs where possible, with no hidden or extra charges for employers or employees.
In addition, Scottish Widows has also confirmed its long term commitment to the corporate pensions market by announcing it will continue to invest c£20m per annum in its Corporate Pensions proposition.This will enable the company to continually evolve to ensure it is best placed to service the needs of its customers providing value add corporate pension schemes now and in the future.
Scottish Widows recognise that in order to comply with the new requirements of the DWP regulation there are significant cost implications for all parties, and wherever possible these costs have been absorbed.
Following a thorough review of the corporate pensions business, Scottish Widows will implement the following changes to enable full compliance ahead of deadlines set by the DWP.
In November this year, Scottish Widows will remove initial commission. In April next year they will implement a 75 basis point price cap for all employees in qualifying schemes currently paying an AMC in excess of that amount on a default fund. In April 2016 they will remove ongoing commission and significant reduction in the average lifetime charge in AMD schemes by capping all charges at the active rate + 5bps (subject to a 35bps floor).
David Holton, Director for Corporate Propositions at Scottish Widows said:
“Today’s announcement provides a clear road to compliance in challenging timeframes that treats customers fairly and is transparent, while at the same time confirming our long term commitment to the market through significant investment.”
