BoI arm 'charging very high fees' for pensions
FEES and charges being imposed on pension savers by Bank of Ireland Asset Management (BIAM) for its managed fund are among the highest imposed by any provider, financial advisers have said.
But BIAM, a subsidiary of Bank of Ireland, defended the high fee structure on its actively managed fund, claiming the charges were competitive.
It charges 3pc per contribution, and a 0.75pc annual management charge. In addition, there is a €26.32 administration fee every four months.
High fees on pension funds have come in for strong criticism. A recent study by think-tank TASC found that high charges can swallow up much of the final value of a pension.
Financial adviser Justin O'Gorman, of MyAdviser.ie, said the BIAM fees, particularly the quarterly €26.32 administration or policy fee, were the highest he had ever come across.
"The policy fee is there to cover the ongoing administration that is required with a pension," he said.
"Having looked at the various contracts on offer, policy fees range between €3.50 to €5.42 per month and includes indexation each year," Mr O'Gorman explained. "The €26 quarterly fee, which works out at €8 a month, is the highest policy fee charge I have ever seen."
In contrast, the Irish Life managed fund has no charge per contribution. It has a 0.75pc annual management charge and a €3.70 monthly administration fee.
The performance of the BIAM fund has been roughly in line with the average fund performance for the market. Last year the BIAM fund was up 21pc, but over the past three years it fell 9.4pc a year.
A spokeswoman for BIAM said: "BIAM's annual management fees are very competitive within the marketplace."
Asked if the fees were not the highest in the market, she added: "The quarterly administration fee certainly seems to be high when you compare it to the figure quoted from Irish Life. However, we are not aware of the level of service Irish Life provides for this fee."