A ban on active member discounts could penalise consumers where employers have chosen to pay part of the charges for their existing employees says the National Association of Pension Funds.
The NAPF also says the OFT’s suggestion that governance committees should be placed at provider level could lead to conflicts of interest, in a wide-ranging critique that welcomed its recommendations but argues they could have been more radical.
NAPF chief executive Joanne Segars says: “The success of the OFT’s short- and medium-term recommendations will depend on how they are implemented by the Government and the industry. There are several barriers that need to be overcome before we can achieve the right outcomes – especially around governance.
“It is essential that the Government and regulators bring in policies that ensure sustainable and good DC pension provision in the long term. Acting quickly will ensure that pension savers, especially those who will be saving into a pension for the first time through automatic enrolment, benefit from these improvements from the outset.
“The NAPF believes that governance, transparency of charges, value for money and economies of scale are critical to delivering good workplace DC pensions, so we urge the OFT to continue to monitor progress in the DC landscape.”