UK – Keith Ambachtsheer has insisted the UK government must lift the "dysfunctional" constraints currently placed on the National Employment Savings Trust (NEST) if it wants the scheme to succeed.
Asked what he would do if he were the UK's pension minister for a day, Ambachtsheer, director of the Rotman International Centre for Pension Management, responded immediately that he would "make NEST work".
Speaking at the National Association of Pension Funds Investment Conference in Edinburgh, the academic also said he had recommended to the Department for Work & Pensions that it consider the introduction of a charter for auto-enrolment compliant pension funds, thereby guaranteeing they meet certain, minimum standards.
Talking about the launch of NEST, the defined contribution (DC) fund launched by the government to accept any company wishing to comply with auto-enrolment, he said: "This is the best thing the UK has done in pensions in a long, long time, but you put constraints on it that are actually quite dysfunctional. Get rid of the cap on contributions."
He also endorsed the introduction of a license system for auto-enrolment compliant pension funds, backed by a number of people within the industry, including Now Pensions.
"I really did think you needed some kind of charter before [an] organisation was allowed to work in this space," he said.
He said the charter should require providers to meet certain standards that ensure good outcomes for members.
"If you can't, you shouldn't get the charter," he said.
Ambachtsheer also said it was unrealistic for the for-profit sector to meet market needs, one of the arguments used to support the continuation of NEST's restrictions.
"You need some other way to get these organisations off the ground, other than a for-profit motive," he said.
Nonetheless, the academic praised UK pension minister Steve Webb's defined ambition (DA) agenda, despite noting that the proposals needed some "flesh on the bones".
"The goal should be the same, the ambition should be exactly the same as with a DB plan," he said.
"It's to fill the gap between the Pillar I pension and the ambition of what people ideally would like as their realistic post-retirement income so they can maintain their standard of living."
Ambachtsheer, a dual Canadian and Dutch citizen, also said the complicated Dutch approach to risk-sharing should not be seen as the solution.
"It only takes about half a day to explain what collective DC is, and then another half day to explain why it doesn't work," he joked. "This is really tough for the Dutch because they are really, really stubborn."
He also referred to Einstein and noted that one should only aim to make things "as simple as possible, but no simpler".
"My observation about our industry is that when we try to fix something, instead of making things less complicated, we make things more complicated," he said.
"The classic example right now is my friends the Dutch," he added, referencing a pension fund's ability to impose rights cuts on pensions in payment. "This is the new version of solidarity in the Netherlands."
He said it failed the "elevator test", as one did not stand a chance of explaining the motivation behind rights cuts to a pensioner in the time it took an elevator to reach the top floor of a skyscraper.