Resolution : Friends Life scraps deferred member charges on AMD

10 April 2014

Resolution Limited

Friends Life scraps deferred member charges on AMD schemes

Following Steve Webb's announcement in relation to workplace pension charges, Friends Life, the insurance and pensions provider has announced it will offer all its active member discount (AMD) schemes the chance to move to a single charge at the current active member rate with immediate effect.

All members within these schemes whether active or deferred, will pay the current active member charge (AMC), subject to a minimum*. The change means that all future deferred members will see no increase to their charge if they move employers or cease contributions.

Colin Williams, Managing Director, Corporate Benefits at Friends Life, commented:

"The introduction of auto enrolment means that, under current AMD scheme structures, large numbers of employees pay higher deferred member charges on each pension they accumulate as they move between employers. We're taking action now to remove deferred member charges.

"We have already started working with a number of our clients who proactively wished to move to a flat charge structure, at the active member rate, and we are now extending this offer to all of our clients with an AMD scheme.

"Due to the quality of our AMD portfolio and our relatively limited exposure we can make these changes for the benefit of our customers without a material financial impact on our business. We are aware that many AMD schemes in the market are on higher AMC terms and we are happy to consider offering a single AMC solution to schemes that wish to future proof ahead of the ban."

"According to the 2013 OFT report into workplace savings there are approximately 10,000 schemes in the UK that currently use an active member discount. If all pension providers take the same stance as Friends Life, there will be a large number of members that stand to benefit."

Advisers, pension managers or employers who require further information on this change can emailcorporatenewbusiness@friendslife.co.uk.

* Active member charges will be subject to a minimum of 35bps. A minimum of 30bps will apply if a five-year commitment is agreed. 

- Ends -

All Enquiries:

Helene Barnes

Tel: 0845 268 5281

Peter Webb

Tel: 0117 928 4777

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