Money Marketing’s Time to Get Personal campaign has been pushing for the Government to lift the admin burden on employers with quality occupational schemes in place to prevent mass levelling down when personal accounts come into operation in 2012.
Speaking at the Tisa Retirement Savings Challenge conference on board the HQS Wellington last week, Jones said that companies which choose the basic pay option would still have to ensure that minimum contributions were reached.
He said: “Qualifying earnings need not be the only way personal accounts offer a product. We may well offer a basic pay product with some checks against your adherence to the minimum you have got to put in but there is nothing to stop a scheme offering a basic pay product.”
Legal & General wealth policy director Adrian Boulding says that Jones may be reacting to moves by insurance firms to introduce a similar option for group personal pensions.
He says: “I think that Tim has woken up to the fact that us and other insurers will be offering this catch-up option for our group personal pensions because most existing schemes use basic pay.
“He is reacting to that and will copy it by the sounds of it because personal accounts will be competing with the private sector.”
But Standard Life head of pension policy John Lawson says that employers will have a considerable admin burden, even if they choose the basic pay option.
Jones said Pada would start a tender process with potential scheme administrators in January, which would take “the thick end of 18 months”.
He is believed to be in close talks with half a dozen possible partners.