Master Trust Transfer

[bluepaddy]

Hi,

My employer is planning to transfer their defined contribution scheme to The Aon Ireland Master Trust. The funds is the master trust appear to have far lower annual management charges of 0.36% versus 0.65% & 0.75% today. There is very little information about the transfer of the funds other than a single statement stating that "there will be no asset transaction costs" on the bulk transfer. Based on this statement is it safe to assume that the existing funds will transfer at no cost to the master trust (i.e. 100% allocation, no bid offer spread, no commissions, etc.)?

Thanks.

 

[Steven Barrett]

It is safe to assume 100% allocation as they have to get 100% allocation. There is no bid/ offer spread. Can't make any assumption on commission.

 

[GSheehy]

100% allocation on the transfer but maybe less than 100% on the regular contributions going into the new scheme?

If there was no contribution charge on the old scheme and there is on this one then that would negate some of the saving on the AMC.

For example, a 5% contribution charge (over a 20 year period and assuming a 3.13% growth rate) would be like having an AMC of 1.47% Vs 1% (on a 100% allocation contract).


Gerard

www.prsa.ie