Pensions minister Steve Webb has once again threatened to “name and shame” providers who refuse to tackle legacy issues.
Pressure has been growing on providers to tackle old, relatively expensive schemes since an audit found up to £26bn of assets subject to charges over 1 per cent.
A 0.75 per cent cap on auto-enrolment default schemes is to be enforced from April this year.
Speaking at the ABI retirement conference today, Webb revealed he had consulted lawyers over whether he would be able to publish the names of firms reluctant to move customers from old schemes to cheaper modern plans.
He said: “I’ve had conversations with all the main providers who make up that £26bn and there is a huge variation in the vigour with which providers are tackling that.
“Some of them engage enthusiastically, set up their plans with how they’re going to deal with it, but other providers wanted to change the subject, which is pretty dismaying.
“If the industry is going to get its act together it’s got to realise its legacy is a stain and unless there’s a concerted, vigorous attempt to deal with it it’s going to be very hard to move forward.”
Webb added if providers remain uncooperative, he would be forced to name them.
He said: “If there are providers who I don’t believe about tackling their legacy I will be forced to say who they are and who they are not, to applaud those who are serious and name those who are not. As you can imagine, my lawyers have a view on this. So I want to make sure that I’ve got this right.”
Earlier in the day, ABI chairman and Axa UK group chief executive Paul Evans claimed regulation was blocking providers moving customers from legacy plans to modern schemes.
But FCA director of long term savings and pensions Nick Poyntz-Wright denied regulation was getting in the way.
He said: “There is a challenge for providers to say rather than continue to operate these more traditional, old-fashioned, relatively high charging schemes, can’t we just put them onto our more modern platforms?
“We’re certainly supportive of that in principle. We’ve worked closely with a number of firms in other products areas and the issues actually tend not to be regulatory but legal or contractual.
“I’m not pretending those are easy but it might require the firm to accept some residual legal risk. Often it’s very small but it’s a judgment call for the firms as to whether that’s the right thing to do. It would be quite unusual for that to be a regulatory barrier.”