Head of pensions policy John Lawson has already met Labour peer Baroness McDonagh and Conservative peer Lord Blackwell and is due to meet Labour’s Baroness Hollis of Heigham and the Conservatives’ Lord Skelmersdale next month.
It wants the Government to look at a dual earnings’ model, using band earnings and basic earnings, but the Government is understood to believe that this would be too complex.
Most employer pension schemes are based on basic pay but the Government wants the exemption test for personal accounts to be based on total band earnings.
Many in the industry have expressed concern over the exemption criteria for the test, suggesting they will lead to mass levelling down and damage existing provision.
Lawson warns that if current proposals remain, thousands of companies could close schemes and move employees into inferior personal accounts.
He estimates that three out of four employer schemes would fail the test, including Standard Life’s scheme, and is meeting individually with members of the House of Lords to raise awareness of the issue.
Lawson is concerned that the issue will be overshadowed by the debate on the 10p starting rate of income tax when the Pensions Bill reaches the House of Lords, which could be as early as April 22.
Lawson says: “The proposals will disadvantage low-earners, in particular, women. We are aiming to raise awareness among the Lords as it would be disastrous if they stay in the current form.”