Pensions minister Steve Webb has poured cold water on the idea of lifting restrictions on the National Employment Savings Trust (Nest), arguing that legal obstacles remain.
In November 2012 the government published a call for evidence on lifting the restrictions on Nest following calls from politicians, most vocally shadow pensions minister Gregg McClymont, for them to be scrapped ahead of a scheduled review in 2017.
McClymont has argued that the government only needs to prove that the restrictions on Nest, a contribution limit and ban on transfers in and out, impedes its ability to meet its public service obligation.
Webb (pictured) has previously said lifting the restrictions could contravene European Union (EU) laws.
Giving evidence to the Work and Pensions committee on governance and best practice in workplace pension provision, Webb said the government would also need to prove the market was failing as a result of Nest operating with the restrictions.
‘My legal advice is different from Gregg’s. My legal advice is that we would need evidence of market failure,’ he said.
‘We are gathering that evidence, and even if we had that, there’s still a process to go through.
‘There is a risk we get too hung up with the EU and… unless you get evidence the market is failing you won’t be able to change anything.’