The value of your pension pot at retirement will depend on the amount that's paid in as well as your investment returns after charges, so it's important that charges represent value for money and that investments are appropriate for you and other scheme members.
The Trustees of your pension scheme carry out a check on the charges deducted from your pension pot and, as a minimum, the fund(s) you're invested in if you don't make your own choice. Details of all charges that apply to your scheme, your Trustees' assessment of value for money, and your Trustees' investment governance activity are shown in the Chair's Statement produced each year and can be found below.
Your questions answered
How much are the charges?
Details of the charges advised to the Trustees are shown in the attachments above.
What's the effect of the charges?
Although the charges may only take a small percentage of its value every month, it's important that you understand the impact those charges can have on the amount that is paid out. To do this we have provided some illustrations above to show the difference charges can make for a selection of investment funds.
Do the charges represent value for money?
The Trustee Board provide an assessment of whether the scheme offers value for money, details of the scheme's default arrangement(s) and the steps taken to obtain details of all charges in the Chair of Trustees' Annual Statement. Relevant extracts of the statement are shown above.
It's important you know what charges are deducted from your plan but also that you understand the valuable oversight provided by the Trustees.
What do you mean by investment governance?
Trustees have different investment governance responsibilities depending on the size of their scheme. Generally, the larger the scheme the more they have to do. This might be a review of the fund(s) the Trustees invest your contributions in if you make no choice (the scheme's default solution), or the whole range of funds that are available within the scheme.
The Trustees are required to document the principles they follow when reviewing the default, or full fund range, in their statement of investment principles. Trustees of larger schemes need to include how they take environmental, social responsibility and corporate governance risks into account within their statement of investment principles and post it online.
If you have any questions regarding the information provided on this page you should contact your employer or the Trustees.