Pensions minister Steve Webb offered reassurance auto-enrolment and NEST would not lead businesses to ‘dumb down' their pension schemes.
Webb announced today the threshold for auto-enrolment into workplace pension schemes would be in line with the PAYE threshold, which will be £7,475 in April 2011.
He also said there will be no exemption from auto-enrolment for micro-businesses and quashed fears the scheme will encourage businesses with existing pension schemes to reduce benefits for members.
Webb said: "Estimates of levelling-down amongst employers are overstated.
"Levelling-down will be limited, and easing the certification of acceptable occupational pension schemes will prevent this. Fewer than 10% of employers will level-down."
However, Stuart Southall, chairman of the Association of Consulting Actuaries, says: "Our latest research, conducted this summer, shows amongst larger firms four out of ten may level down benefits and in smaller firms, where ‘quality' schemes are run, three out of ten are likely to ‘level down'.
"DWP has said its research points to a lower incidence of levelling-down, but their research was conducted over a year ago when 56% of respondents said they were unaware of the reforms and when the future of these measures was much less certain."
Webb said it is unlikely many people will end up being worse off with auto-enrolment than they would be with means-tested benefits. This is because many of the people covered by auto-enrolment are part of households with overall incomes lifting them out of means-tested benefits.
It is expected the total assets under management by NEST will reach £50-£100bn within 30 years, with up to £9bn under management by 2017.
Tim Jones, chief executive of NEST and part of the review team of the report, said NEST and DWP will make it as easy as possible for members to understand how occupational pensions work.
"Communication with members of schemes will be easy, little and often," he said.
"If people want to see a yearly statement on paper, we will support that, but NEST looks to the future, and we plan to use websites and smart phone applications."
Tom McPhail, head of pensions research at Hargreaves Lansdown, says: "This is good for consumers. The website created for auto-enrolment is great, and will help employers get it off the ground. The threshold makes sense and employers can now work towards 2012.
"There will be disquiet in the pensions industry as providers will see NEST as a threat. However, the bottom line is that member control of capital is more important."
McPhail says the minimum contribution will be affordable for low earners. Based on someone earning just enough to be automatically enrolled, the monthly contribution will be £11.70 per month.
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