On the go: In its fourth annual report, Legal & General's independent governance committee gave the company an overall high score, but flagged up steep charges on legacy pension products.
In particular, L&G's mature savings section, which manages the older pension range no longer available to new clients, was put under the spotlight. This includes the active and deferred members in the Group Personal Pension Plan No. 1, and those deferred members in the Group Personal Pension Plan 2000 and the Group Stakeholder Pension Plan who have yet to draw their benefits.
The report from the IGC, chaired by well-respected pensions industry figure Dermot Courtier, stated: “Mature Savings had already limited ongoing charges to no more than 1 per cent a year for active members of its workplace schemes.
“Only a few active members faced paying more than 1 per cent because of higher charges on initial units purchased during their early years in the scheme. In 2018, the IGC asked L&G to remove the initial units’ charge – which L&G did for active members.”
The IGC also asked “L&G to limit these charges to no more than 1 per cent for members who are no longer active”.
The report continued: “L&G considered this but decided against it on the grounds that it wouldn’t be fair to other members of the with-profits fund.
“We disagreed with their decision. But as their rationale was not unreasonable, and we recognised that they must consider other factors outside our remit, we decided that we should accept the decision and bring the matter to a close.”
