Elite Retirement Account Schedule of Fees & Services This document helps you understand the fees for establishing and administering a SIPP. It also provides you with a comprehensive guide to all costs, and answers frequently asked questions about our charges. Please note all fees are subject to VAT. Example scenario getting started An adviser recommends a SIPP for a client. The client has three pension funds with other providers which will all be transferred as cash. In this scenario, the client s adviser is happy to facilitate the transfer which means that he has requested pension discharge forms from the current providers and, once received, sends them off to the scheme administrator. The SIPP administrator establishes the Elite Retirement Account and sets up a bank account. Within a short period of time the other providers transfer their funds to the administrators, who deposit them in the SIPP bank account. The administrator tells the adviser when each fund has been transferred, and once the last one has arrived the adviser implements the investment strategy he has agreed with his client. What would the costs for this be? Getting started SIPP establishment 295 Transfer in charge (with the adviser handling the paperwork) Nil SIPP annual administration fee (taken in advance) TOTAL 700 for single-asset SIPP, or 750 for multi-asset SIPP Ongoing charges SIPP annual administration fee TOTAL per annum All fees are subject to VAT. Please see Glossary for definition of single-asset SIPP. Page 1 October 2011
Example scenario taking benefits After several years, the client decides to start drawing benefits from his SIPP. He decides to take his maximum allowed tax free cash along with maximum permitted income, paid monthly. This is known as withdrawing income via Capped Drawdown. What would the costs for this be? Taking benefits from the SIPP Calculation of HMRC maximum / minimum benefits 125 Establishing first tranche of Capped Drrawdown 150 TOTAL 275 Additional tranche brought into Capped Drawdown 75 Total ongoing charges in retirement SIPP annual administration fee Annual income charge 150 TOTAL per annum 555 for single-asset SIPP, or 605 for multi-asset SIPP All fees are subject to VAT. Example scenario moving into property The client then decides to purchase a commercial property, as he feels a regular rental income better suits his investment strategy this stage of his life now that he is drawing regular benefits. The adviser disinvests the existing investments, and the SIPP fund is used to acquire the client s chosen property. In addition to the SIPP fees, the client also expects to pay for a valuation as well as solicitor s fees and stamp duty (if applicable). These fees can all be settled from the SIPP fund. The annual property management fee covers various aspects of managing the property, including the invoicing and receipt of the rent from the tenant. What would the costs for this be? Acquiring the property Handling the purchase 650 Pension fund borrowing 250 TOTAL 900 New total ongoing charges in retirement SIPP annual administration fee 455 Annual income charge 150 Property administration fee 275 TOTAL per annum 880 All fees are subject to VAT. Page 2 October 2011
Detailed Schedule of Fees & Services Please also see the Frequently Asked Questions About Fees section below, which form part of this schedule of fees. Benefits and Payments Calculation of HMRC maximum Capped 125 Drawdown Annual fee for maintaining Capped Drawdown* 150 per annum In advance Additional tranche brought into Capped Drawdown 75 Registering for Flexible Drawdown 125 Annual fee for maintaining Flexible Drawdown* 150 In advance Additional tranche brought into Flexible Drawdown 75 Fee for exhausting the fund under Flexible Drawdown 125 Transfers In cash where your adviser fulfils transfer requirements In cash where Talbot & Muir deals with transfer requirements (per pension entitlement transferred, although if handling multiple scheme transfers at the same time this fee will be capped at 200) In specie - basic fee (per pension entitlement transferred) Nil 20 50 Max in specie transfer fee 500 upon completion of upon completion of Transfers Out In cash from the default SIPP bank account including where all investments have been sold In specie - basic fee (per pension entitlement transferred) 150 50 Max in specie transfer fee 500 No fees will be refunded in part or full when a transfer out is initiated. This includes but is not limited to establishment, annual and borrowing, property and income facility fees. *Annual fee applies whether an income is withdrawn from the pension scheme or not. Page 3 October 2011
Contributions Single contributions after establishment and 20 variations to regular contributions Refund of contribution (where allowed) 20 In-specie contribution 500 Investing in Property Annual property administration 275 In advance Purchase/transfer in specie acquisition fee 650 Pension fund borrowing 250 Environmental screening report 150 VAT registration (where applicable) 100 Quarterly VAT return 50 Sale or disposal 350 Other Investments Investments with UK authorised unit trust/oeic or insurance fund investments (per fund) Transactions conducted through a nominee account 20 per investment capped at 200 per scheme year. 10 per investment capped at 200 per scheme year. Establish an alternative deposit account 20 Unquoted shares and other non standard investments (per ) Loan to unconnected third party 500 995 (plus disbursements of third parties) Other Costs Ad hoc valuations 100 Work required to ensure compliance with changes in Time costed pension legislation and regulation Establishment of bypass trust 195 Annual meetings 200 plus travel costs Page 4 October 2011
Frequently Asked Questions (FAQs) about Fees Please note references below to we, us, and our are to the SIPP administrator. Pension administration 1. What are the establishment fee and annual fee for? The establishment fee covers the creation of the SIPP, including opening the default SIPP bank account, verification that our application form is fully completed and signed (including correct anti-money laundering identification) and processing any initial contributions including the reclaim of tax where appropriate. The annual fee includes the preparation of the reconciled annual statement, regular reconciliations during the year and fulfilling all regulatory requirements including all general communications. Where appropriate, the annual fee also covers any requests to transfer out or to facilitate annuity purchase, and processing a death claim. No fees will be refunded in part or full when a transfer out is initiated. This includes but is not limited to establishment, annual, borrowing, property and income facility fees. Should the member decide not to proceed with the SIPP once it has been established, the establishment fee is still payable. 2. How do the fees for contributions work? There are no fees for any contributions made at the point of the SIPP being established, whether they be single or establishing regular contributions by standing order. Once the SIPP has been established, a separate fee applies to additional single contributions as well as any changes to existing regular contributions in place. 3. How do the fees for the transfer in of cash benefits work? If the adviser presents correctly completed discharge forms together with the SIPP application, and is prepared to chase the old pension scheme up to the point of the transfer being executed, no transfer fee will apply. Alternatively if we arrange it we will charge 20 per transfer, and if handling multiple schemes transfers at the same time, this fee will be capped at 200. 4. How do you charge for the transfer in of partially crystallised funds? In order to accept the transfer in of partially crystallised funds, a SIPP with a minimum of one plan and one sub-plan must be established. The plan will receive all uncrystallised transfers and, under legislation, the other sub-plans (which are separate arrangements) receive the crystallised benefits. The sub-plans will be fully crystallised. Normal full establishment and annual administration fees will apply to the SIPP. Each sub-plan containing crystallised benefits will attract fees for Capped Drawdown designation. 5. What are your charges for going into Capped Drawdown for? The calculation of HMRC maximum income limits is payable at the point Talbot & Muir provides confirmation of these figures to you or your advisor. This will include valuing the SIPP and calculating the income figures. Please note this fee is payable even if you elect not to proceed with going into Capped Drawdown. In addition the fee for establishing the first tranche of drawdown income will be payable once you go into Capped Drawdown. This fee covers the work required to reconcile and revalue the SIPP in accordance with legislation and then pay benefits, this also covers the administration of PAYE payroll, deduction of tax if required and making the appropriate returns to HMRC. Also included is the facility to vary the level and frequency of income payments. For clients who elect the phase their income withdrawal an additional one off fee will be paid for each separate vesting. Investment-related fees 6. Is a single authorised unit trust/oeic or TIP application for two funds c o n s i d e r e d one or two s? This will count as one. When we complete an application form for a directly held unit trust, OEIC, or insurance company TIP, we apply a fee for each application, not fund. We will cap our charge at 200.00 (10 s) per scheme year. Page 5 October 2011
7. Do your fees include the stockbroker s, etc, fees? No, our investment fees relate to the recording and reconciling of investment s by us and do not include stockbroker, investment manager or nominee fees and charges. Property fees 8. How do you calculate fees for dealing with the purchase of property? Our fee is fixed and reflects typically the amount of time spent on a property purchase. Through adopting this approach we acknowledge that more complex cases will typically result in more time being spent on the purchase, in these instances we will still charge our standard fee. Borrowing 9. What are the fees if my SIPP borrows money? Our fee is fixed and reflects typically the amount of time spent completing loan application forms and providing the lender with the information they require. Through adopting this approach we acknowledge that more complex cases will typically result in more time being spent dealing with the loan application; in these instances we will still charge our standard fee. General 10. Do your fees increase? On 1 st October each year the SIPP annual administration fee and Property annual administration fee will increase in line with the rise in the Average Weekly Earnings (AWE) index over the previous year. If the AWE ceases to be published, or if the calculation of the AWE is altered we may substitute a comparable index. We may at any time increase or amend all or any of our fees or charges payable from your SIPP in such a manner as we may determine. We endeavour to ensure that our fees remain competitive for the benefits of our clients. 11. Do you receive any other income in relation to my SIPP?. Cater Allen will pay Talbot & Muir a fee based on the amount held on deposit with them. For example based on a current interest rate of 0.15%, a deposit of 10,000.00 would generate a fee of 15.00 per annum payable to Talbot & Muir by Cater Allen. Your account will receive the full amount of interest quoted for the account type and amount on deposit. The payment of this fee will not reduce the published rate of interest paid on your Cater Allen deposit account. 12. Are there any other fees? We reserve the right to charge for additional services on a time-cost basis relevant to the expertise and seniority of our staff involved. 13. Is there anything else I should know? All expenses, charges, and outgoings whether in respect of the investments contained in your SIPP (including the costs of purchase, sale management, maintenance and valuation of freehold and leasehold properties, if any, and other investments) or other expenses however incurred shall be charged to your SIPP. In the event of a levy being made on us under the Financial Services Compensation Scheme or any levy or taxation being imposed on us or your SIPP under any statutory provision affecting the business of SIPP providers, operators, administrators or insurance companies, we may recover from your SIPP an amount equal to the proportion of such levy or taxation that we may reasonably determine. This will be on a basis similar to how the levy, tax, liability, charge or other payment has been calculated. Page 6 October 2011
Glossary Establishment Administration Crystallisation Protected rights Transfer in In specie Tax reclaim Lifetime annuity Corporate action OEIC TIP Investment firm Connected party The creation of a SIPP plan to the point where it is ready to be used. The process of looking after the SIPP on an ongoing basis. This includes but is not limited to many things such as providing a reconciled annual statement, setting up any initial regular contributions or savings and reclaiming tax where appropriate. The act of starting to take benefits (tax free cash and/or income) from the SIPP. It may also be called vesting. This is the name given to the fund built up by contracting out of the state second pension. Transferring the value of pension benefits from an existing pension scheme to your SIPP either in cash or in specie (see below). The transfer of an asset other than cash from another pension scheme to this one In most cases pension contributions receive tax relief and we reclaim 20p from HM Revenue and Customs for each 1 you contribute to your pension. This is added to your fund. A policy issued by an insurance company which provides a guaranteed income for life in exchange for a lump sum (your accumulated SIPP fund). An event initiated by a public company or collective investment scheme that affects the securities issued by that company and requires a response from the administrator. Open ended Investment Company, also known as a collective investment. Trustee investment plan. A firm appointed by the plan holder to manage the investments within the SIPP on their behalf or act on an execution only basis. The process by which the SIPP plan can purchase assets directly from the individual. Single-Asset SIPP In order to qualify as a Single-Asset SIPP, in addition to the main SIPP bank account held with Cater Allen Private Bank, the SIPP may only contain one other non direct property holding. For example, this may take the form of either a single Discretionary Fund Manager portfolio, a single Platform, a single stand alone Unit Trust/OEIC/Trustee Investment Plan, or a single direct equity holding. As soon as the SIPP owns more than one of these assets, or purchases direct property (either singularly or as part of a syndicate), it is then treated as a Multi-Asset SIPP. TALBOT & MUIR 22-26 Clarendon Street Nottingham NG1 5HQ t. 01158415000 f. 0115841 5027 www.talbotmuir.co.uk enquiries@talbotmuir.co.uk Talbot & Muir is the trading name for Talbot and Muir Limited (company number 2869547) and Talbot and Muir SIPP LLP (company number OC306490), both registered in England, registered address 22 Clarendon Street, Nottingham, NG1 5HQ. A list of directors/partners is available upon request. Talbot and Muir Limited provides administration to Self Administered Pension Schemes. Talbot and Muir SIPP LLP provides administration to Self Invested Personal Pensions, and is authorised and regulated by the Financial Services Authority. Page 7 October 2011