Scottish Life has launched a group personal pension (GPP) featuring a range of commissions and fund-...
Scottish Life has launched a group personal pension (GPP) featuring a range of commissions and fund-based charging structures.
The product, branded Talisman, is designed to have transparent charges for clients. It features no exit charges, no policy or member charges, it has high allocations and penalty-free terms for reducing or stopping contributions at any time.
The group said that unlike stakeholder pensions, the GPP will not be a "stripped-down" product and will feature the full range of Scottish Life's benefit and investment options, including access to a range of select funds managed by external managers such as Fidelity, Schroders, Perpetual and Phillips & Drew.
Steve Bee, head of pensions strategy at Scottish Life, said: "It was not long ago that people were talking as if stakeholder would mean the death of GPPs. The recent shift in the Government's thinking means that GPPs are now at the heart of the pension reform programme and have a very bright future indeed.
"After more than a year of uncertainty we expect to see an explosion of activity over the next few months."
There are two versions of the plans, both of which contain 5% bid/offer spreads on investments and contain no initial charges. The first is a high allocation option which starts with a rate of 105.27%. Depending on the commission option taken and the size of the scheme, the annual management charge varies between 0.65% and 1.23%, part of which is paid to the broker.
The low fund charge version of the plan has allocation rates varying between 103.75% and 100.5%, depending on size of scheme and commission taken. The annual management fee will range between 0.5% and 0.75%, depending on the type of commission taken.
Commission options include indemnified initial commission of up to 25% of premiums paid during the first year for terms of 10 years or more.
The clawback period is 12 months. A 20% version of this is also available.
Fund-based renewal commission is up to 1% per year but premium-based renewal commission is not available.
There is also a level commission option of up to 5% per year and this can be indemnified for up to five years. Commission for single premiums is up to 5%.
Under the high allocation plan for a scheme with 30 lives and contributions of £1,000 per year average per member, the net annual management charge would be 0.73% under nil commission.
On 25% indemnified commission or 5% level commission, the charge would increase to 1.23%. The allocation rate would remain at 105.27%.
Special terms will be considered on an individual basis for schemes where the total annual premium is in excess of £225,000.
For more information, contact 0345 192021.
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