Legal and General (L&G) will cap its charges on the default fund within workplace pension schemes at 50 basis points (bps) from 9 September.
This comes after pensions minister Steve Webb announced the government will consult on a cap charges into all schemes used for auto-enrolment (AE).
L&G's announcement also precedes an Office of Fair Trading (OFT) report, due this week, into the value for money defined contribution (DC) schemes present to members.
L&G's 0.5% charge covers both the annual management charge (AMC) and the fund management charge (FMC) levied on members in the default. The insurer will also offer the price deal to existing DC members.
Earlier this year, L&G asked The Pensions Regulator (TPR) for permission to move members in high-charging legacy schemes into better value schemes without member consent.
L&G Assurance Society chief executive officer John Pollock said: "We have long been advocates of value for money and have avoided opaque charging structures such as active member discounts. This commitment will give our customers confidence in selecting L&G as their provider for AE.
"Ahead of the government's forthcoming consultation on maximum charges for AE schemes, we have made our position clear that no employees saving in a workplace pension scheme should have to pay more than half a per cent a year of their retirement savings pot.
"In May we established our independent governance oversight committee for contract-based DC pensions, with Paul Trickett as its independent chairman, giving these customers the best regulatory regime currently available.
"Together these initiatives ensure independent monitoring, value for money and top quality service is available across the board for all our customers."
Elsewhere, the FT reports pensions minsiter Steve Webb is pressing for an industry-wide cap on charges in AE schemes.
The paper said officials at the Department for Work and Pensions are looking at applying a cap, but only when savers have been automatically enrolled and are given no choice about the scheme in which they are enrolled.
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