Morten Nilsson, CEO of NOW: Pensions comments on the auto enrolment charges cap consultation

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For immediate release: Wednesday 30 October 2013

Morten Nilsson, CEO of NOW: Pensions comments on the auto enrolment charges cap consultation: “Pensions should do what they say on the tin – provide a lifetime income in retirement that is fair value relative to the contributions paid.

High charges eat away at pension pots, foster mistrust in the industry and act as a disincentive to savers.

Over a lifetime of saving, the difference between the final fund values when comparing the NOW: Pensions scheme which charges 0.3% Annual Management Charge (AMC) and £1.50 per month administration charge with a scheme with a 1.5% AMC is 26% – a staggering differential*.

But, the reality is, a cap on charges won’t necessarily ensure a better deal for pension savers. In the past, the UK pensions industry has been able to artfully side step caps, increasing fees and charges elsewhere to compensate.

In addition, a flat AMC model results in regular savers with larger pots cross subsidising members who are in the scheme for a short period of time or who have smaller pots. A low investment charge coupled with a monthly pounds and pence administration charge is more equitable as it spreads the costs more evenly across all members. It is also more transparent and easier to understand.

More widely, for employers selecting a pension scheme, charges should be high on their priority list but of equal importance should be the quality of the default fund and the governance of the scheme.

With auto enrolment, 90-97% of people will end up in the scheme’s default fund so it’s essential that this fund is fit for purpose and is actively managed to mitigate risk.

With charges under pressure, it’s almost inevitable that many providers will be tempted to push members into cheap, passively managed funds which won’t necessarily deliver the risk managed returns savers deserve.”

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For further information:

Amy Mankelow
NOW: Pensions
Tel: +44 203 640 9075 / 07941 105879

Jennifer Stevens / Victoria Leyton
Lansons Communications
Tel: +44 207 566 9723  / +44 207 294 3620

Notes for editors:

*Based on salary on average salary of £26,200 and contributions of 8%.

NOW: Pensions   


NOW: Pensions is a multi-employer trust. The investments are managed by NOW: Pensions Investments, a subsidiary of ATP in Denmark, and the administration is carried out by Paymaster, an established UK third party administrator.

The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:

  • Nigel Waterson, former Shadow Pensions Minister
  • Imelda Walsh, former Group HR Director of Sainsbury’s
  • John Monks, member of House of Lords and former General Secretary of ETUC and TUC
  • Christopher Daykin, former Government Actuary
  • Win Robbins, former Head of European Fixed Income at Barclays Global Investors

NOW: Pensions is committed to developing a better workplace pension provision in the UK by offering a simple, high quality, cost efficient and systematically risk managed pension product that delivers better retirement savings for UK employees. With over 45 years’ experience providing Denmark’s working population with stable and consistent pensions returns, NOW: Pensions is set to transfer the knowledge acquired in Denmark to the UK pension market. Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.

In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.

The ATP Group

Arbejdsmarkedets Tillaegspension (ATP) / Danish Labour Market Supplementary Pension is a statutory pension fund. It was established as an independent entity in 1964 with the objective of ensuring a greater retirement income for the Danish population. ATP has since developed to become one of the largest pension funds in Europe and the largest pension fund in Denmark. Together with the tax-financed basic state pension, ATP provides basic income security in old age for the Danish population.

ATP covers almost the entire Danish population representing 4.8 million members and 160,000 employers. In addition to the ATP Scheme, the ATP Group administers a number of pension and social insurance schemes, including several for the Danish state.

The ATP Group total assets under management amounted to DKK 602bn/approximately GBP 67.5bn  at 30 June 2013. ATP invests in a wide variety of assets globally. Investment categories are broadly: equities, interest rates, credit, inflation and commodities.

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NOW: Pensions has a good technical infrastructure combined with a pension product suitable for our team. We couldn’t be happier with NOW: Pensions.
Martin Woods,