Saving into a personal pension instead of a group personal pension could take a toll on fund growth
Saving into a personal pension instead of a group personal pension could take a toll on fund growth - People with an individual personal pension could retire with as little as half the value of a comparable group pension fund facilitated by an employer - Last updated on Wednesday 22 September 2021 - The absence of a third party protecting the interests of individual personal pensions means they perform worse than group personal pensions (GPP), according to new research from the University of Bath's School of Management. Without employers' involvement in the creation and monitoring of a pension fund, the difference in performance can vary between 0.96 to 1.67 per cent per annum, even when both types of scheme are offered by the same fund management company, and purport to be identical. "Tighter regulation is urgently needed to ensure better monitoring of individual personal pension plans, to improve returns for individual investors," said Professor Ania Zalewska , Director of the University's Centre for Governance, Regulation and Industrial Strategy. "There has been a focus on unfair charges for pension funds but this research reveals a much bigger problem which is totally hidden from public eye - the difference in performance of pension funds according to whether they have investment oversight or not." GPP schemes are overseen by a governance body that monitors the pension fund. These Independent Governance Committees (IGCs) scrutinise the value for money of the scheme, escalating any concerns to the provider's board, and if necessary to the Financial Conduct Authority.
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