The table below shows you the charges and transaction costs associated with each of the Scheme’s available Defined Contribution funds.
We’ve also included a couple of examples of what your fund might look like once these charges and costs have been taken into account.
| Provider/Fund | TER (%) | Transaction costs (%) |
|---|---|---|
| L&G | ||
| Cash Lifestyle Strategy | 0.43 – 0.47 (depending upon term to retirement) |
0.00 - 0.02 (depending upon term to retirement) |
| World Equity Index | 0.46 | 0.03 |
| Multi-Asset | 0.47 | 0.02 |
| Cash | 0.43 | 0.00 |
| Phoenix Life | ||
| Deposit Administration | Not applicable1 | Not available |
| Prudential | ||
| With Profits Cash Accumulation | 1.112 | 0.17 |
Source: Providers
1 There are no explicit charges on the Phoenix Life Deposit Administration Fund.
2 For the Prudential With Profits Fund, the costs of running the Fund are taken into account when the bonus rate is declared. Prudential currently estimates running costs to be 1.11% p.a., however the charge is not guaranteed at this level, and may change in the future.
Example illustrations of the impact of fund charges and costs on member's DC fund values
Provided below are some example illustrations of the impact DC provider’s charges and costs have, in practice, upon the DC fund value for a typical member of the Scheme.
The Trustee has not provided illustrations for the Phoenix Life Deposit Administration Fund or the Prudential With Profits Fund because there is only one member invested in each of these funds and therefore their annual benefit statement provides a more accurate projection of future benefits.
- Example member 1: the youngest member (age 42) who is therefore 23 years from their retirement age of 65 with a current fund of £1,730;
- Example member 2: a member of average age (age 60) who is therefore 5 years from their retirement age of 65 with a current fund of £3,640;
The effect of costs and charges on the Cash Lifestyle Strategy (which is the strategy within which members are invested unless they self-selected investment funds), the Multi-Asset Fund (which is the fund with the highest costs and charges, ignoring funds which have no members invested) and the Cash Fund (the fund with the lowest costs and charges) have been illustrated, in accordance with the guidance.
The examples below illustrate the effect of the costs and charges at different ages on these example members’ projected retirement pots.
Example member 1:
For the youngest member, the estimated impact of costs and charges on the accumulated fund values is shown in the table below.
|
Cash Lifestyle Strategy |
|||
| Years to retirement | Fund value before charges | Fund value after charges | Impact of charges |
|---|---|---|---|
| 23 | £1,730 | £1,730 | £0 |
| 20 | £1,760 | £1,730 | £30 |
| 15 | £1,800 | £1,730 | £70 |
| 10 | £1,840 | £1,730 | £110 |
| 5 | £1,890 | £1,730 | £160 |
| 0 | £1,890 | £1,700 | £190 |
|
Multi-Asset Fund (highest costs and charges) |
|||
| Years to retirement | Fund value before charges | Fund value after charges | Impact of charges |
|---|---|---|---|
| 23 | £1,730 | £1,730 | £0 |
| 20 | £1,760 | £1,730 | £30 |
| 15 | £1,800 | £1,730 | £70 |
| 10 | £1,840 | £1,730 | £110 |
| 5 | £1,890 | £1,730 | £160 |
| 0 | £1,930 | £1,730 | £200 |
|
Cash Fund (lowest costs and charges) |
|||
| Years to retirement | Fund value before charges | Fund value after charges | Impact of charges |
|---|---|---|---|
| 23 | £1,730 | £1,730 | £0 |
| 20 | £1,660 | £1,630 | £30 |
| 15 | £1,540 | £1,490 | £50 |
| 10 | £1,430 | £1,350 | £80 |
| 5 | £1,330 | £1,230 | £100 |
| 0 | £1,230 | £1,120 | £110 |
Example member 2:
For the member of average age, the estimated impact of costs and charges on the accumulated fund values is shown in the table below.
|
Cash Lifestyle Strategy |
|||
| Years to retirement | Fund value before charges | Fund value after charges | Impact of charges |
|---|---|---|---|
| 5 | £3,640 | £3,640 | £0 |
| 0 | £3,650 | £3,570 | £80 |
|
Multi-Asset Fund (highest costs and charges) |
|||
| Years to retirement | Fund value before charges | Fund value after charges | Impact of charges |
|---|---|---|---|
| 5 | £3,640 | £3,640 | £0 |
| 0 | £3,730 | £3,640 | £90 |
|
Cash Fund (lowest costs and charges) |
|||
| Years to retirement | Fund value before charges | Fund value after charges | Impact of charges |
|---|---|---|---|
| 5 | £3,640 | £3,640 | £0 |
| 0 | £3,380 | £3,310 | £70 |
- Projected fund values shown are estimates and are not guaranteed (they have been rounded to the nearest £10);
- Representative members are based upon the Scheme’s membership as at 5 April 2024;
- The illustrations assume no further contributions are paid;
- The illustrations are shown in today's terms, and do not need to be reduced further for the effect of inflation which is assumed to be 2.5% p.a.;
- Transaction costs have been averaged over a three-year period to reduce the level of volatility and a floor of 0.0% p.a. has been used for transaction costs if these were negative so as not to potentially understate the effect of charges on fund values over time.
- Growth rates are consistent with those used by the providers in members’ annual benefit statements;
- The projected growth rates and costs and charges assumed in the illustrations are as follows:
| Strategy / Fund | Growth rate | Costs and charges |
|---|---|---|
| L&G Cash Lifestyle Strategy | 1% – 3% p.a. (depending upon term to retirement) |
0.43% – 0.5% p.a. (depending upon term to retirement) |
| L&G Multi-Asset Fund | 3% p.a. | 0.5% p.a. |
| L&G Cash Fund | 1% p.a. | 0.43% p.a. |
Value for member assessment
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Member borne charges and transaction costs
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Default fund arrangements
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