Unrest growing over telephone opt-outs

Firms have called for clarification after the National Employment Savings Trust (Nest) proposal to allow telephone opt-outs for members was criticised by law firms as a breach of legislation and regulatory guidance.

But both the Department for Work and Pensions (DWP) and the regulator have refused further guidance, despite a number of Nest’s rivals being commercially disadvantaged by this.

B&CE claims potential clients are threatening to take business to Nest for the telephone opt-out feature, which they are unwilling to offer until they know whether or not it is legal.

Pensions minister Steve Webb was asked about his view on the process at a conference, but failed to offer a clear line.

“There is a balance to be struck in the opt-out process,” he said. “If we bury the fact you can opt out that is quite threatening. If we are up front at the start, the opt-in figures will be higher.”

John Jory, director of B&CE, which launched its People’s Pension mastertrust last month, said telephone opt-outs were “entirely against the spirit of” the regulations.

“DWP came up with a process to force people to think about, [whether to opt out]. The regulator should just say ‘no’.”

Morten Nilsson, CEO at mastertrust Now Pensions, said: “It is an issue that there is not more clarity. We and other providers are developing our solutions and need to make sure we all have a level playing field.”

Graham Vidler, director of communications and engagement at Nest, said: “We are aware of speculation on Nest’s approach to electronic opt-outs by different channels.

"These comments are being made without the benefit of having seen our processes, which we are developing currently. Others should be reassured that Nest will not design or implement any process that is non-compliant with legislation or regulatory requirements.”