The decision on whether to allow branded providers to be involved in personal accounts will be made by the new delivery authority rather than the Government.
Work and Pensions Secretary John Hutton told the Association of British Insurers’ Saver Summit in London last week that he would not rule out a role for branded providers but the extent of their involvement, if any, was a matter for the delivery authority.
The exact remit of the delivery authority will be outlined in December’s White Paper, a DWP spokesman has said.
Hutton told delegates that the delivery authority will be an independent body that will advise Government on the operational structure of personal accounts and provide the support to get contractual arrangements in place.
He said the Government will give the delivery authority “a significant degree of autonomy in operational decision-making” and seek the experience and skills of the private sector to run it.
Hutton said the Government is aware of the potential for levelling down and is looking carefully at suggestions that personal accounts could be ring-fenced and given an annual contribution limit.
He admitted that some employers will level down as a result of the reforms, which he described as “an art rather than a science”, and said there was no “magic solution” to prevent levelling down entirely.
Hutton said: “We should not rule out the possibility at some point in the future of branded providers but that should be a decision taken by the delivery authority.
“We are determined to go further in removing unnecessary regulation and simplifying regulatory burdens wherever we can. That is why we are taking forward our deregulatory review. This offers potential for radical change, not merely to rewrite legislation but a real opportunity to cut red tape and make it easier to deliver workplace pensions.”