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Providers hit out at pensions regulator over Nest ‘favouritism’

Two rival auto-enrolment pension schemes have united in condemning The Pensions Regulator’s decision not to publish a list of providers that cater to the small and micro market.

Earlier today, the regulator said it had rejected the idea of giving employers a list of available pension schemes because it would be ”disproportionately onerous” for schemes and the regulator to conduct the kind of assessment needed to maintain the list.

Both Now: Pensions and The People’s Pension have reacted angrily at the the decision, saying the regulator is unfairly promoting Government-backed Nest.

Now: Pensions chief executive Morten Nilsson says: “As a trusted source of information on auto enrolment, The Pensions Regulator has considerable influence. It has direct communication with every company about auto enrolment but has only ever actively promoted Nest.

“The publication of a list of providers would have helped to level the playing field and encouraged employers to think more carefully about which scheme is best for them and their employees.”

The People’s Pension head of policy Darren Philp says: “Competition and choice for employers is a good thing. The whole point of this consultation from the regulator was to help employers find good pension schemes and to signpost schemes that are open to all, but it’s not doing that – it will only flag Nest.

“That’s a significant market distortion, it means it’s much more difficult for any provider to compete with that when it comes to the SME sector.

He adds: “The regulator is doing good work and so we want to direct employers to their website so they can make best use of that but why would we if all the regulator is doing is marketing a competitor?

“They’re putting all their eggs in Nest’s basket.” 

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Is this bias really surprising?

    NEST will be the default for opted out schemes. The small and micro market is hardly profitable. Remember that TATA was the only bidder for NEST. If it looses money it is not improbably that TATA will just walk away. If that happens – or they tell the Government that charges must rise, just imagine how much egg there will be on faces in Westminster.

    The head banana has just fled the NEST – this in itself could be a sign.

  2. After the failure of Stakeholder pensions, NEST was always going to be promoted above all other schemes, and it is why the Pensions Minister tried to keep advisers out of the market by stating that firms did not need advice. I had that article to hand when meeting a small firm and the MD burst out laughing, saying that was the reason I was sat in front of her, to give advice.

    That company now has a quality scheme, salary exchange arrangements and almost 100% membership prior to their staging date. Not sure that NEST would have delivered what the company wanted.

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