# Pension Admin Charges



## FutEng (13 Jun 2013)

I am closing to signing up with Zurich through a local broker.

Zurich charge of 1.5% per year for admin on the fund.

Is this an ok rate? Seemed a little high to me.


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## North Star (13 Jun 2013)

Yes this does seem high. Zurich have some low cost annual management charge (amc) options which, if you meet their condtions, charge an AMC of 0.6% or 0.8% per annum. Some of their other standard pension contracts have AMCs of 0.75% or 1%.

You should also check what  net allocation rate you are receiving on your contributions to make sure you are getting value here too. Sometimes there can be an AMC versus allocation rate trade off, in this event, your broker should be able to provide different projections for the various choices allowing you to decide what is the best option for you.

If your broker is charging you trail commission ( added to AMC every year) then under the Consumer Protection Code your broker is obliged to disclose the nature of the service they will provide in return for this ongoing charge.

I hope this helps.


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## FutEng (13 Jun 2013)

North Star said:


> Yes this does seem high. Zurich have some low cost annual management charge (amc) options which, if you meet their condtions, charge an AMC of 0.6% or 0.8% per annum. Some of their other standard pension contracts have AMCs of 0.75% or 1%.
> 
> You should also check what  net allocation rate you are receiving on your contributions to make sure you are getting value here too. Sometimes there can be an AMC versus allocation rate trade off, in this event, your broker should be able to provide different projections for the various choices allowing you to decide what is the best option for you.
> 
> ...



Thanks. Very help full.

broker has a once off charge off 300 euro. 

after that its Zurich charge of 1.5%


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## Dave Vanian (14 Jun 2013)

FutEng said:


> Thanks. Very help full.
> 
> broker has a once off charge off 300 euro.
> 
> after that its Zurich charge of 1.5%


 
You need to ask your broker what commission they're getting from Zurich Life.  As North Star has pointed out, Zurich Life themselves will charge 0.6% or 0.8% on some contracts.  Anything more than that means that the broker is probably getting seom form of commission on top.


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## FutEng (14 Jun 2013)

Thanks Folks.

Following my latest negotiations with broker the "Zurich" rate has miraculously dropped to 1%.


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## Dave Vanian (14 Jun 2013)

FutEng said:


> Thanks Folks.
> 
> Following my latest negotiations with broker the "Zurich" rate has miraculously dropped to 1%.


 
Out of curiosity, did the broker initially tell you that they were receiving no commission over and above the €300 fee?

Have they now clarified how much commission they're actually getting?  

As a Financial Broker myself, I don't care two hoots how much another broker charges for their services - that's a matter between them and their clients.  But for God's sake - they have to tell the person who's paying the commission - you - how much you're paying them.


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## FutEng (14 Jun 2013)

I have asked for a detailed breakdown on where the 1% is going. I wont be signing anything until I am happy.

The impression I got initially (naive on my part but I wasn't made any wiser) was that they were making 300 euro and nothing more and Zurich were getting the rest!


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## North Star (14 Jun 2013)

I have to agree with Dave re his comments about the need for clear disclosure on the charges/fees. All pensions except Executive pensions are required to disclose all broker remuneration in full so check your illustrations/projections as provided by your broker. Transparent disclosure allows you to have a 'reasonableness' check on what your broker is earning. Remember to check the 'net allocation rate' you will recieve on your contributions before you sign up. 
Regards Vincent


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## FutEng (14 Jun 2013)

North Star said:


> I have to agree with Dave re his comments about the need for clear disclosure on the charges/fees. All pensions except Executive pensions are required to disclose all broker remuneration in full so check your illustrations/projections as provided by your broker. Transparent disclosure allows you to have a 'reasonableness' check on what your broker is earning. Remember to check the 'net allocation rate' you will recieve on your contributions before you sign up.
> Regards Vincent



This is a directors pension (as in I am a director of my own company).... so not sure if this is relevant?

Anyway, I'll check my net allocation rate before signing.

Cheers


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## Dave Vanian (14 Jun 2013)

FutEng said:


> This is a directors pension (as in I am a director of my own company).... so not sure if this is relevant?
> 
> Anyway, I'll check my net allocation rate before signing.
> 
> Cheers


 
A directors' pension is one of the few financial contracts where it's not a legal obligation on the broker to disclose commission.  Personally I don't think this should be so, but that's another matter.  

That said, there's a big difference between what a broker is legally obliged to disclose and what a broker just *should* disclose.  In my opinion, if you're paying a person to do a job, then you should know what you're paying them, whether or not the law says that they must tell you.

I think you need to get clarification about the following, in writing or by e-mail: - 


Any charges on each contribution?  (Policy fees, bid/offer spreads etc.)
Allocation rate applying to each contribution?
Any penalties for early exit?
How much commission is the broker getting from the transaction, broken down into the following commission types: initial commission, renewal commission, trail or fund-based commission, over-ride commission?
Insist on getting the above in writing before you sign on the dotted line.  If you don't understand any of the replies, cut and paste it into a reply here.


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