Personal Pension  

Aegon to pay renewal commission until April 2016

Aegon has confirmed it will continue to pay renewal commission until April 2016 for employers who have staged before April 2015, at a level which “reflects the revised pricing for that scheme”, as it unveils is pricing plans ahead of government charge restrictions.

All other commissions for these schemes will be removed at the point the pricing changes are implemented.

For employers with a staging date from April 2015, all commissions will continue until the staging date and will be removed at that point.

The changes follow the announcement from Aegon in April 2014 that a 0.75 per cent charge cap will be added to all new entrants for schemes that stage from September 2014 onwards, in line with the DWP announcement in March on charge caps.

As a minimum, Aegon will now match the current active price on the majority of schemes with active member discounts.

For a small number of schemes, Aegon revealed this will require the introduction of a monthly employee fee which the provider has yet to reveal the level of.

For employers who have staged before April 2015, the changes will apply to both new and existing members within the timeframe laid out by the DWP.

For employers with a staging date from April 2015, these changes will apply to both new and existing members, from the staging date.

Aegon confirmed like Standard Life it is in the early stage of plans to introduce an employer charge, where appropriate, for some services.

In April Standard Life announced it will introduce a ‘scheme management fee’ of £100 per month for smaller employers with modest contributions who have previously agreed terms with the provider that are above the 0.75 per cent scheme charge cap.

Aegon did not reveal what their charge is likely to be.

Angela Seymour-Jackson, managing director of workplace solutions at Aegon UK, said: “We’ve already demonstrated our capability and capacity to deliver auto-enrolment, and this experience enables us to help our advisers, employers and schemes implement the latest DWP requirements.

“Auto-enrolment has given us the opportunity to work with employers and advisers to make the successful transition, and the latest DWP changes will strengthen these relationships further.”

Last month Aegon revealed in its annual results that it expects the charge cap to result in costs of £20m to £25m a year.

This could be a substantial proportion of annual revenue, given that its profit in the first quarter of 2014 was £22m.

Aegon implemented the cap in August last year.