The National Employment Savings Trust (NEST) has called on the government to scrap restrictions on its scheme by next year.

In its response to the government’s consultation on removing the restrictions, NEST said the transfer ban and annual £4,400 contribution cap would be detrimental to members and employers.

“These restrictions impinge on a member’s freedom to save more, to take action to consolidate their pension pots or to transfer their NEST pot to their new scheme if they move job,” it said.

In addition, it suggests that lifting the restrictions would eliminate complexity and the administrative burden for employers, and claims that the restrictions can be removed without damaging private market provision because of the ‘unique elements’ to its framework, such as public service obligation, fixed price and inability to offer products beyond an automatic enrolment.

NEST chief executive Tim Jones said: “NEST and the pensions industry as a whole needs to pull out all the stops to make a success of automatic enrolment as the volume of employers being staged rises exponentially in 2014.

“NEST’s restrictions complicate the decision-making process of medium-sized employers, many of whom will experience a private pensions sector already busy supporting other clients and who will therefore look to NEST as a potential provider. Removing the restrictions will help us help those employers to get the job done.”

NEST chair Lawrence Churchill added: “The most important consideration for the trustee is the impact of the restrictions on our members and our potential members. Our experience to date suggests that the restrictions already impact negatively both on employers and members; by restricting choice and preventing members from growing their pots as they might wish to. These unique restrictions prevent NEST members from consolidating existing pots, or adding to their contributions to make up for lost time and cause employers additional complexity.”

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