Aegon says the Personal Accounts Delivery Authority must tell savers who are going into personal accounts that charges could rise in the future because not doing so goes against the principles of treating customers fairly.
Aegon says personal account running costs will be affected by differences between actual and assumed employer and employee behaviour.
The life office says unknown factors, such as whether opt out rates will match expectations, could mean initial charging assumptions are over optimistic.
If this leads to costs exceeding charges, Aegon believes the scheme rules should allow charges to rise to avoid the risk of calling on tax payer subsidies.
Aegon head of business regulation Steven Cameron says: “Giving Pada the power to increase charges if necessary will be a vital component. The risk of having to do this can be reduced by building margins into the initial charges.
“But it would go against the spirit of treating customers fairly, if people aren’t told of this possibility before they are auto-enrolled into Personal Accounts. As we move towards implementation stage, the industry needs to work with PADA to get the best outcomes for all consumers.”