2% annual management fee for pension

[olivia]

I am reviewing my pension that is with BOI Pensions. They are charging 2% Annual Management Fee. Is this fee in line with others? Can it be negotiated (most things can these days). The pension is currently tied up and there is no management involved - just an annual report.

 

[North Star]

Hi Olivia; is your pension a self administered type pension or is it an insurance wrapped product i.e you invest in unit linked funds. If it is the latter then 2% annual management fee is very uncompetitive and there are many alternatives with significantly lower management charges. Most have annual management charges in the 0.75% to 1% range though there are some cheaper options.
It is important to ensure that you have a competitive cost structure otherwise this will significantly erode the benefit of any investment gains.
In some cases there are investment options which are expensive in terms of annual management charges but because they have delivered very good performance even after the charges have been deducted, then these options are worth looking at based on a reasonable cost/benefit analysis. However with any higher cost option you would want to be confident that it will deliver superior returns.

If your pension is a self admininistered type scheme then it may well be worth either negotiating or looking for a lower cost provider.

Kind regards Vincent

 

[Baracuda]

I know this question is a pure shot in the dark but did you take out this pension between 1997 and 2001? If so you are paying way over the odds. These pensions however have loyality bonus built in so if you are going to seek an alternative pension you should get a statement of reasonable projection for your existing pension and the same again for the proposed pension. Look at what both would provide when you reach your NRA and go for one that gives you the highest value.

You would really need to speak to a pensions advisor who would be able to guide you though the jargon and ask them to do a writen and signed comparson statement between the two pensions.