UK – The UK government has opened the door to the possible removal of two statutory constraints to the National Employment Savings Trust (NEST), launching a consultation to see whether the limits on the auto-enrolment provider are counter-productive.

The Department for Work & Pensions (DWP) has published a "call for evidence" on the impact of the annual contribution limit and transfer restrictions on NEST.

It said it was seeking views and evidence on whether these constraints were influencing employers' choice of automatic enrolment scheme in unintended ways.

Steve Webb, minister for pensions said: "We are already seeing the positive effect NEST is having on the world of pensions. But we need to make sure this continues as automatic enrolment moves on to smaller firms, and that the constraints on NEST are not a barrier to good consumer outcomes."

In May, the government appeared to oppose removing the restrictions on the auto-enrolment provider in its response to the work and pensions select committee report on auto-enrolment.

The committee's report had backed freeing NEST from the constraints.

The government had responded that it was unclear whether the limits were acting as a barrier to NEST's mission.

It also claimed it would be illegal for the government to remove them just to increase the take-up of NEST.

The DWP said NEST had a public service obligation to ensure everyone eligible for automatic enrolment could access a low-cost pension scheme.

It had been designed to target low to moderate earners, smaller employers and firms with a high turnover of staff that were not served by the existing market, it said.

The department acknowledged the select committee's conclusion that the annual contribution limit and transfer restrictions on NEST might prevent the not-for-profit scheme from "servicing market failure", as well as its recommendation that the government remove them.

"But the evidence available is not conclusive, and the government doesn't want to propose any changes without understanding their impact," it said.

It is now seeking evidence and views from employers, industry, consumers and their representatives, it said, and added that it would consider these fully before deciding on any action.

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