Aegon has warned The Pensions Regulator’s hardline stance on active member discounts risks damaging the private sector and could lead to members receiving less money at retirement.
In a statement to defined-contribution scheme trustees issued earlier this month, the regulator warned pension schemes it does not view the deals as either “fair” or “acceptable”.
TPR says it takes the same view of AMDs offered through contract-based pension schemes.
Aegon UK head of regulatory strategy Steven Cameron (pictured) says: “We are surprised that The Pensions Regulator has singled out AMDs as inherently unfair and we would welcome wider industry debate on this issue.
“Attempting to restrict the use of this approach actually makes it harder to deliver fairness. We are entering a critical time for workplace pensions and we need a thriving private sector alongside Nest.
“We need to allow employers and advisers to select what works for them and dismissing AMDs runs a real risk of worsening member outcomes.”
This follows accusations from TPR executive director of DC June Mulroy that the industry has been guilty of using AMDs to rip off consumers.
She said: “We have found that deferred members have been paying an awful lot more for nothing – there were no efforts made to find them and no efforts made to get information to them.
“Transaction charges in general have plummeted in the last 20 years but members do not seem to be getting any benefit from that. I think active member discounts have been seen too often and too easily as a way of making money.”