The Combined Nuclear Pension Plan has dropped Prudential as its defined contribution provider as its trustees considered other companies could offer a better service.
As first reported by FTAdviser's sister publication Pensions Expert, the pension scheme, which has a defined benefit and a defined contribution section, chose Aegon as the new provider for some members of the latter.
In a statement published on the scheme’s website, the trustees said it was their duty and statutory obligation to review the DC investment funds and services for the benefit of the members, to ensure they were getting a good service and value for money.
"After a lot of thought and advice, the trustee concluded that other providers could offer a better service, more suitable investment funds and greater value for money for members than the Prudential," it stated.
Aegon, which was chosen after a public procurement for new administrators of the DC section, will "provide an enhanced service to all members" - with better communications including member online access and services - at a "charge significantly less than that of the Prudential", the trustees noted.
With Prudential, the more than 6,100 Combined Nuclear Pension Plan DC members were paying an annual management charge of 0.65-0.75 per cent per year, which will drop to 0.26 per cent with Aegon’s default funds.
Under the current rules, a pension scheme which provides money purchase benefits must review its default strategy and the performance of its default arrangement every three years, or when there is a significant change in a scheme’s investment policy or demographic of its membership.
The Pensions Regulator has launched a pilot programme in this area, where it has contacted more than 500 DC schemes to ensure that their trustees are regularly reviewing their default funds.
As part of the programme trustees have been asked to review guidance which outlines TPR’s expectations.
They were then asked to confirm if the strategy and performance of their scheme’s default arrangement had recently been reviewed and remained suitable by completing a simple online declaration form.
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