What charges are applied to my workplace retirement savings on ARC?
We’ve designed Aegon Retirement Choices (ARC) around a clear and transparent, customer-focused charging model. So you’ll see exactly what you’re paying for across all your ARC investments.Mon Jun 26 11:18:00 BST 2017
Three key charges
There are three main charges that make up your total annual charge:
- service charges - these are to cover the administration costs for your ARC products
- investment charges - these are included in the fund price and are applied by the investment managers. Charges will vary based on the assets you choose to invest in
- personal adviser charge - you’ll only pay this if you have a personal adviser. It's a charge for the advice given to you, and is agreed between you and your financial adviser
You’ll find details of your annual charge in your illustration.
Each workplace savings scheme is individually priced, and you’ll find details of your service charge in your illustration.
The charge is based on the total value of your assets and we’ll deduct it monthly, on or around the first business day of the month, from your cash facility.
Depending on what we’ve agreed with your employer, your service charge may be based on a two or three tier charging structure where your service charge reduces as the value of your ARC account increases. Your illustration will confirm what charging structure you have.
* We’ll include the value of any other eligible Aegon pension products you have. For example, if you have an existing Aegon personal pension valued at £100,000, as well as £50,000 of assets held on ARC, we’d calculate the level of your annual charge based on a total fund value of £150,000.
Once your total fund value reaches £250,000 your overall service charge will reduce(Opens new window)
Some schemes may also have a customer fee applied. This is a fixed monetary amount that will be deducted from your plan each month. This will be deducted proportionately across all assets held on your ARC account, including non-pension investments. This amount won’t increase unless a new scheme price is arranged with your employer.
Your ARC service charge will only apply to your ARC products. It won’t apply to any money you hold elsewhere with us, for example your Aegon Personal Pension or Retiready products.
These charges are for the investment funds you choose to invest in, and are set by the investment managers. These are detailed on the investment list(Opens new window)
You can find an explanation of the charges terminology(Opens new window) on our website.
The new charges ‘cap’
The government (specifically the DWP) has introduced changes to the charging structure of pension schemes. They have introduction a charge cap for schemes used to meet auto enrolment rules.
The combined cost of your scheme's service charge and the investment charge for the schemes default fund need to comply with the Cap of 0.75%. This means that if you stay invested in your scheme’s default fund, and don’t actively select a fund the maximum charge you’ll pay is 0.75%.
If you’ve appointed a financial adviser, you’ll have agreed with them how much you’ll pay for the advice they give you. Adviser charges will be taken as either a percentage or monetary amount from your product wrapper’s cash facility, depending on what you’ve agreed with your financial adviser.
Adviser charges can be set up in three ways:
- Ad hoc
Your adviser can give you more information on each, as part of agreeing their payment structure with you.
We’ll charge £75 a year if you take income from the drawdown part of your Aegon Self-invested Personal Pension (SIPP). This charge will be set up when your first drawdown pension payment is made, and will apply yearly after that to cover ongoing administration.
If you don’t take any drawdown income in the 12 months since your last income drawdown payment, we won’t apply this charge. It will become payable again when you restart taking drawdown income.
If you have more than one drawdown wrapper in your Aegon SIPP, for example, as a result of more than one drawdown to drawdown transfer, you’ll only pay a single £75 yearly charge. We’ll deduct this proportionately across all of the drawdown wrappers you’re taking income from.
A £15 fee will apply to every trade of company shares, gilts and investment trusts placed through ARC. This fee will apply to any buy or sell, and will be taken from your appropriate product wrapper’s cash facility at the time of the trade.
For Example, if you’re in Gate 3 , you have access to purchase shares directly and hold them in your wrapper. For shares, this stockbroker fee would apply.
A £10 fee will apply to every trade of exchange-traded funds (ETFs) placed through ARC. This fee will apply to any buy or sell, and will be taken from your appropriate product wrapper’s cash facility at the time of the trade.
If you and your financial adviser appoint a discretionary fund manager (DFM), a percentage charge will be applied to the value of the funds held with them. We’ll pay this charge to your DFM on your behalf. This charge will depend on which DFM your financial adviser appoints, and will be taken monthly from your relevant product wrapper’s cash facility. You’ll find details of these charges in your agreement with both your financial adviser and DFM.
If you invest in an Aegon Ireland bond, Aegon Ireland will set the product charges to support the servicing and administration of the product. We’ll deduct these charges quarterly from your gross General Investment Account (GIA) cash facility. You’ll find more information on your personal illustration, if this applies to you.
While investing through the gross GIA means no tax is deducted from your funds, you may find that some external product providers will apply a charge for investing in their product wrappers. Your financial adviser will be able to provide more information on this.
If you choose to buy a Retiready ISA then this is charged separately. The Charge will be made up of a service charge and an investment charge, and you can find details of these charges on the Retiready website.
Your cash facility
Your investments are held in what we call ‘product wrappers’. You'll need to keep a minimum of 0.25% of the value of each of your product wrappers in your cash facilities to cover charges.
Most charges will be taken from the cash facility of each of your wrappers, however, investment charges aren’t as these are usually included within the fund price. We’ll only deduct investment charges from the cash facility if the investment provider instructs us to. Your adviser will be able to tell you if this applies to any of your investments.
It’s your responsibility to make sure that your cash facilities contain enough money to cover all your charges, as these may be more than 0.25%. If there’s not enough money in your cash facilities to meet any charges we’ll automatically sell some investments, starting with the largest liquid asset.
Changes to charges
We might need to change our charges in the future.