A financial adviser has launched a pension scheme to directly compete with the government-backed, and taxpayer funded, National Employment Savings Trust (NEST).
Dean Wetton, director of Dean Wetton Advisory, which provides investment advice to institutional clients, has created the Pensions Umbrella Trust (PUT), as a similar scheme to the government vehicle.
This comes after Danish pension provider ATP announced it will launch an independent mastertrust to rival NEST in 2012.
Wetton's pension scheme, also a master trust, allows any employer to join it and set their own contribution levels.
"All of the parts of the PUT are independently-sourced, such as the investment advisers, administrators and accountants," said Wetton.
This, he claimed, is what sets the PUT apart from existing master trusts offered by insurers such as Standard Life.
Standard Life today announced it has extended its trust-based proposition to include a defined contribution master trust arrangement.
Charges on the scheme, which was initially set up last December, vary according to the investment strategy chosen by members.
However, Wetton said there is a 0.65% administration charge and, with the most basic diversified passive fund, a 0.30% investment management charge, bringing annual charges to just below 1% per year.
These charges will be reduced as more employers join the scheme, Wetton said.
He added it is not possible to compare these charges to those set by NEST, as NEST's charging structure is different.
Wetton said schemes other than NEST should be given a government guarantee to improve public confidence in pensions.
"It would be a bit like the Pension Protection Fund, or the guarantee banks have," he said.
"Schemes of a certain standard, such as those with the National Association of Pension Funds' (NAPF) pension quality mark, could be covered by a government guarantee."
He added NEST also has an unfair advantage over other schemes because of government backing.
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