Up to 90,000 employers would be forced to review their defined contribution (DC) schemes if a charge cap was introduced, according to a government impact assessment.
The Department for Work and Pensions (DWP) is currently consulting on a range of options to crack down on excessive charges in DC, including a cap of 0.75% or 1% on annual fees (PP Online, 30 October - www.professionalpensions.com/2303754).
In its impact assessment on the report, the DWP states that 90,000 schemes would need to be reviewed if the limit was set at 0.75%.
If the cap was set at the higher level, the number of schemes that would need reviewing would be between 25,000 and 35,000.
The pensions industry has warned that many employers due to begin auto-enrolling staff in 2014 will not have enough time to react to any changes introduced as a result of the consultation.
Hargreaves Lansdown head of corporate research Laith Khalaf said the consultation had come much too late.
He said: "It is worthwhile having a debate on charges, but it should not be happening now. This should have happened two years ago."
With the consultation due to close in December, Khalaf said that January was the earliest legislation could be introduced.
"Steve Webb is targeting those companies that will be auto-enrolling in April," he said. "But they can't just snap their fingers and make the changes.
"We would advise that it takes at least six months to set up an auto-enrolment scheme and for many of those companies the process will probably be under way.
"The important thing for employers is to have certainty so they know what they can and can't do within the auto-enrolment framework."
LEBC divisional director Glynn Jones said: "For an employer having to undertake a review, there would be significant additional financial costs.
"This seems particularly unfair as they have already taken the responsible route, with incurred costs, of establishing a pension scheme for their employees to comply. So through no fault of their own, the goal posts are effectively being moved and they would be expected to pick up the tab."
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