Bluefin pushes against over-regulation of active member discounts

The Pensions Regulator (TPR) must not make “over-react” to active member discounts (AMDs) in pension schemes, Bluefin has warned.

AMDs are widely expected to be phased out once auto-enrolment reforms kick in.

TPR also said in its latest paper for defined contribution (DC) trustees it does not consider AMDs appropriate for trust-based schemes.

Robin Hames, head of technical, marketing and research at Bluefin said he supports the view on trust-based schemes, but warned the regulator not to take the same approach to contract-based schemes.

"TPR needs to take a number of issues into account before taking such a broad brush approach to contract-based schemes such as group personal pensions (GPPs)," he said.

"The nature of the relationship between employer and ex-employee is fundamentally different from that of trustee and deferred member.

"Employers want to use pensions to attract and retain staff; AMDs give them a means to very visibly do that."

Hames said TPR should focus eradicating poor practice in AMD charging structures if its brief extends to cover all auto-enrolment schemes, rather than abolishing AMDs totally.

"We welcomeTPR's scrutiny in this area, but it must be careful not to generalise or over-react," he said.