Nest has called on the Government to lift the scheme’s restrictions in 2014.
It is the first time Nest, which is funded by a loan from Government, has publicly called for its transfer ban and £4,400 annual contribution cap to be scrapped before a planned review in 2017.
Nest says the restrictions need to be removed to cut complexity for employers who want to use a single scheme for automatic enrolment and to give members the freedom to increase contributions or consolidate their pension savings.
Nest chief executive Tim Jones says: “Nest and the pensions industry as a whole needs to pull out all the stops to make a success of automatic enrolment as the volume of employers being staged rises exponentially in 2014.
“Nest’s restrictions complicate the decision-making process of medium-sized employers, many of whom will experience a private pensions sector already busy supporting other clients and who will therefore look to Nest as a potential provider. Removing the restrictions will help us help those employers to get the job done.”
Nest argues the restrictions can be lifted without damaging private sector providers because of the “unique elements” of the scheme’s framework, such as its public service obligation, fixed price and inability to offer any products beyond an automatic enrolment pension scheme.
This follows news that the Association of British Insurers has softened its stance towards the idea of removing Nest’s restrictions early.
Speaking to Money Marketing, ABI director of life, savings and protection Stephen Gay said: “The industry is not standing in the way of pensions reform and we want savers to get good outcomes, so if it is the case the restrictions are preventing that then they should be removed before the 2017 review.
“If people are not getting access to good schemes as a result of those restrictions or those restrictions are standing in the way of pensions reform, such as a pot follows member automatic transfer system, they should be removed.”