Legal & General has been accused of hypocrisy in calling for a 0.5 per cent charge cap after it refused to accept a small business into its master trust pension.
Capital Management Solutions director Peter Angell was turned down when he attempted to arrange a new pension scheme for a client willing to match their employee contributions up to 5 per cent of salary.
L&G said it would not be offering terms to schemes with less than 50 employees and with an average monthly contribution of less than £200 per member.
A communication sent to Angell by L& G said: “Unfortunately in respect of this group pension scheme enquiry I regret to inform you that we shall be unable to offer you any terms for this prospect. This decision has been based predominantly on the fact that the minimum number of eligible members that we typically offer group pension scheme terms on is 50. We would also require a monthly average contribution of £200 per member.”
Angell has accused L&G of hypocrisy for pushing a 0.5 per cent charge cap when it is not currently prepared to offer terms to his client.
L&G has been ramping up the pressure on the government to bring in a lower cap than the rate in its consultation. On Thursday L&G chief executive John Pollock said: “Legal & General is in favour of having a meaningful cap at 0.50 per cent, not only for new auto enrolment schemes, but for legacy pension schemes as well.”
Angell says: “Having been listening to the BBC Today programme yesterday morning, I just wanted to let you know that although L&G have been telling everyone they can run pensions at a lower cap of 0.50 per cent a year, they are not prepared to put their money where their mouth is.”
An L&G spokesman says: “We are not yet looking at schemes below 50 employees as we’re focused on the 50 to 250 member schemes staging for AE in 2014. We will look at schemes with less than 50 members nearer their staging date in 2015 – its not about size or level of contribution – its all about timing.”