Bid / Offer spread

It's contribution reinvestment time in my company pension fund. One of our investment choices is BIAM whith whom I have about 90% of my fund with.

All available options were presented to us by the relevant companies. The BIAM was very good and the issue of the people leaving was discussed. The presenter answered all questions very well.

We then got a mail from the Chairman of the trustees about the BIAM situation. The mail included some points that Mercer made about the situaton. The last point was "...we have no doubt that BIAM will do all they can to ensure they get the right people, there is clearly a risk that the recruitment of so many people will negatively impact on team dynamics and ultimately on investment performance"

Seeing this mail I then enquiried about what I needed to do to move the funds to another provider and queried about the cost of doing this. I was given instructions on how to do this and was also told that there is a 1% bid/offer spread charge to do this.

Is this normal?

bid/offer

Some funds have a bid offer spread and some do not. It sounds like your have. This basically means that if a unit of the fund is quoted at €1.10 - €1.12, you will buy units at €1.12 and then when you evenutally cash them in you would do so at €1.10.

Your provider may be right in saying that you will incur a 1% loss in transferring out but they are not telling you that when you cash in your pension on retirement you will pay the 1% then also. A bit frugal with the truth.