The National Employment Savings Trust (NEST) has lost out on major corporate business because of the restrictions placed on it by the government, according to chief executive Tim Jones.
The government announced a call for evidence earlier this week on removing the £4,400 annual contribution cap and transfer restrictions into NEST.
But Jones (pictured) told IFAonline's sister tite Professional Pensions the low-cost provider has "undoubtedly" lost out on major business already, which has driven down volume projections.
He said: "It's already limited our ability to work with employers at the top. A number of employers have chosen not to look in detail at NEST at all because of the restrictions and they've told us that.
"That's one of the main reasons why our volume projections are considerably lower than they were. If you go back two to three years we were talking about maybe 4-4.5m people at the end of staging in NEST.
"Now I'm talking about a figure around three million and that's because fewer major corporate employers have chosen NEST."
The outspoken chief executive said NEST remained viable, but questioned whether this was the intended effect of the restrictions.
Jones echoed pension minister Steve Webb's comments that leaving the restrictions in place could leave mid-sized employers with few options.
He said: "There are going to be tens of thousands, 20-30,000 firms, brought in in the summer of 2014 to the duties.
"They're going to be firms that employ somewhere between 60 to 250 members of staff each and with the restrictions in place it's difficult for those firms to choose NEST, because even if they had only one or two people that would earn more than the limit that's implied by the contribution cap.
"Then they either would have to say well we can't use NEST or they have to put in a second scheme for those other people and that's a burden."
Jones argued lifting the restriction would have a limited impact on how quickly NEST repays its £120m loan to the government because it has already lost out on the major and large mid-corporate market.
He said NEST itself did not have a view on whether the restrictions should stay or go, but added as "product champion" he would like to see them removed.
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