THE BIG QUESTION

The Question - Should the Government legislate now for a removal of the cap on contributions into Nest from 2017?

john_lawson.

John Lawson, head of pension policy, Standard Life

Yes. They could do away with it today and it would not make any difference. The argument for the contribution cap is that without it, employers will be encouraged to move good schemes into Nest.

That argument is as weak as ditchwater. What high earners would want to put themselves into Nest where there is no flexibility around things like income drawdown or ability to hold shares?

The question of transfers is a different matter altogether though. If they allowed transfers in straight away that would encourage Nest to be acquisitive in the early years to get assets under management to pay for its setup costs, which is an imperative for them as it is going to take them years to recover their costs.

Transfers are due to be reviewed in 2017 and I think by then it will be fine for them to be allowed. The real threat will be over by 2017 once everyone is in a scheme, and then the decision whether to transfer into Nest would be customer-driven, which is fair enough.