Pensions minister Steve Webb has admitted the government needs to do more to prevent consumers being auto-enrolled into "dodgy" pension schemes.
Speaking at the Tax Incentivised Savings Association (TISA) conference, Webb said he has been repeatedly asked about provision for savers who may move firms, and see their assets transferred from a "good" to a "bad" scheme under auto-enrolment and the pot-follows-member invitiative.
"You might say, people can opt out," he said. "But of course, my assumption would be the average pension scheme member would not know what a good pension was if it hit them in the face.
"The more you think about it, transferring pots from good schemes to dodgy schemes implies there are dodgy schemes out there. What are we doing allowing firms to auto-enrol into dodgy pension schemes in the first place?"
Webb admitted that the quality requirements of what employers were able to auto-enrol into "are pretty light touch".
"The challenge for us is how to make sure these millions of people get auto-enrolled into quality schemes," he said.
Larger firms relied on the government-backed National Employment Savings Trust (NEST) scheme, or large providers able to leverage scale, he continued. Problems lay with smaller firms not well-resourced enough to get value for money for their employees.
"[In general], there needs to be a conversation about what ‘good' looks like," he said.
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