The planned cap on annual management charges (AMC) for pension schemes is too narrow and risks bringing an "artificial" element to the market, Scottish Life has said.
Business development manager Fiona Tait said the provider was against the plan - put out for consultation by the Department for Work and Pensions last week - as it "brings in something artificial".
"Where people talk about charge caps I am not sure they are sure about what they are capping. If they are capping the AMC I do not think it will achieve anything. AMC charges are the one area of pensions where prices have consolidated and come down a lot."
She explained that the AMC does not represent additional charges such as administration, varying investment charges and the price of advice.
"If there is a cap, it is vital that it is not just limited to AMC. But if it does generate more trust in pensions it is a good thing."
Tait also said the removal of consultancy charging as an option for advisers was an unfair move by the government.
She explained the Financial Services Authority had come up with the idea in the first place and providers had then built systems, costing significant sums of money.
"If that had never happened then we would have been disappointed but we would not be in the position we are in now. We built the systems and told advisers to go out and negotiate with employers on that basis."
Tait said the ban "left a lot of people out on a limb".
Service increasingly key
Aiming to be' top three' UK financial planner
Lowest measure since index launched in 1995
Complaints into double figures
Despite lower median annual earnings