UK – Fierce competition in the UK’s new stakeholder pension scheme market will drive the controversial one per cent fee even lower, says employee benefits consultancy, Gissings.

Gissings believes that the market will eventually adopt a flat fee, since some companies are already offering annual management fees below the one per cent cap set by the government.

A spokesperson for Gissings, comments: “One of our clients is already offering fees at 0.7%, yet stakeholder pensions don’t go live until October.”

According to Gissings, the stakeholder market will eventually split into two: one for efficient administration systems and the other for sound asset management. Insurance companies are already splitting the two functions.

Rodney Jagelman, director of corporate affairs at Gissings, comments :”A provider that doesn’t allow for the administration to stand alone may be doomed to failure.”

Elsewhere, Gissings has set up a new advisory service, aimed initially at defined contribution (DC) and stakeholder pension schemes, Employee Communication and Advisory Service (ECAS).

The service is being implemented at a time where there is a lot of migration to both DC and stakeholder plans, says Gissings.

ECAS will offer advice mainly to employees who work for Gissings’ corporate clients, covering a range of issues to do with pensions planning and retirement issues.

There will also be a help line, as well as regular presentations and ‘surgery’ sessions, where employees can meet in forums to discuss developments and problems associated with their pension schemes.

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