Now: Pensions questions integrity of DWP Nest consultation
03 November 2014
The Danish pension provider is concerned that there is an “increasingly apparent absence of a level playing field” between Nest and other auto-enrolment schemes.
Thanks to Money Marketing for this report:
In September the European Commission confirmed lifting the restrictions on Nest - which currently put a cap on annual contributions and ban transfers in and out of the scheme - would not break state aid rules. The DWP launched a legal consultation on the changes, which closed this week.
Now: Pensions also raises concerns over the independence of the consultation process. It says: “We have concerns regarding the independence of this team and its degree of separation from the automatic enrolment team within DWP.”
And the firm warns lifting Nest’s restrictions is a risk to the health of the market. It says the market was “immediately shifted” when the Government announced it would be lifting the restrictions entirely by 2017.
It says: “We believe that by announcing that the restrictions will be lifted in 2017, the competitive market landscape will be shifted immediately as those responsible for selecting a provider will not be influenced by the restrictions. Allowing the transfer restrictions to be lifted as early as October 2015 introduces an accelerated shift in this landscape.”
The provider, which is part of Danish pension fund ATP, also suggests it entered the UK market on false presentences. “[We] entered into the UK auto enrolment market place on the understanding that the Government funding received by Nest was accompanied by a restriction in certain activities in order to create a free market,” it says.
Now: Pensions chief executive Morten Nilsson told Money Marketingit did not have an issue with the lifting of the restrictions but “about Nest being treated in a different way to the rest of the industry”.