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Topics: NEST| | Mark Hoban| occupational pensions
Financial secretary to the Treasury Mark Hoban has defended auto-enrolment and the National Employment Savings Trust (NEST) after a senior pension adviser labeled them the next mis-selling scandal.
On 31 May, David Pitt-Watson, senior adviser at Hermes Pension Management claimed there were not enough restrictions over the quality of pensions provided for auto-enrolment.
In a letter to the Telegraph, Pitt-Watson also said NEST's annual contribution cap of £4,200 will push savers into private schemes which charge too much for fund management.
In a letter to the Public Bills Committee responding to the accusations, Hoban said the government, the Financial Services Authority (FSA) and the Pensions Regulator (TPR) have put in place substantial protection for pension members.
"Trust-based occupational schemes are managed by trustees with a legal duty to act in members' best interest," Hoban said.
"Contract-based workplace schemes are regulated by the FSA which includes a requirement that the level of charges is disclosed at the point of sale."
Hoban continued to defend private pension providers' AMCs and pointed out NEST's will be even lower.
"The majority of workplace pension schemes have AMCs of less than 1% and default funds typically have charges in the range of 0.4-0.6%," said Hoban.
"NEST will provide millions of people on low to moderate earnings or working for smaller employers the chance to save at a level of charges (equivalent to 0.5% AMC) that just is not on offer today."
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| Comment | Hoban defends auto-enrolment after mis-selling claims |
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hoban defends autorenrolment
He would do wouldnt. He is just the mouthpiece for the government and will have moved on by the time the proverbial xxxx hits the fan. Stakeholder pensions for example, according to the government the best thing since sliced bread, now sunk at the bottom of a well never to be seen again. The millions wasted on that. Why is it the government never listen to people who are not in the government or member or the elite club.
Posted by: terry
Cost isn't everything
Funny that the whole discussion is about charges. Who cares how low the charges are if you’re in a naff fund. That’s not to say that exorbitant charges are justified, but I and my clients have personal pensions (of one type or another) that have done quite nicely thank you even at fund management charges of 1.5%. It seems that it’s the cost of everything and the value of nothing. Anyway Hoban can assure al he likes. He won’t be here when chickens come home to roost. He doesn’t need PII cover, nor does he need a Long Stop. He like his predecessors can mess up all he likes, collect a reasonably fat pay cheque, receive his gong eventually and then take up lucrative non exec posts and eventually take the benefit of his superb pension. He won’t have to carry any cans. So what does he care?
Posted by: harry Katz
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hoban defends autorenrolment
He would do wouldnt. He is just the mouthpiece for the government and will have moved on by the time the proverbial xxxx hits the fan. Stakeholder pensions for example, according to the government the best thing since sliced bread, now sunk at the bottom of a well never to be seen again. The millions wasted on that. Why is it the government never listen to people who are not in the government or member or the elite club.
Posted by: terry