UK – The ball’s in the government’s court now that the long-running saga of the Pensions Commission – it’s just released its third report – has come to an end.

The government is expected to release is expected to release a White Paper on pensions shortly, amid press reports that powerful finance minister Gordon Brown plans to scupper some of its main proposals.

In the meantime, the Commission’s newest 45-page missive has summarised some of the debates that had emerged since its second report last year. Key among those was over its proposal for a National Pensions Savings Scheme.

The panel is sticking by this idea. It said: "The Pensions Commission believes that NPSS model of a single national system purchasing operational services from competitive contractors is likely in the long run to deliver the most favourable combination of low cost and member benefits and that a benchmark of 30 basis points for total costs remains a reasonable target at which to aim."

But the investment industry, with the exception of asset management body the IMA, is not convinced by the idea.

The National Association of Pension Funds said a single NPSS run by a government appointed body, responsible for a complex new computer system and the design of a lifestyle fund into which many millions of people will be defaulted, is “not the best way to do it”. It is still putting forward its Super Trusts model.

Aon senior actuary Paul McGlone said the NPSS “effectively equates to a nationalisation of the UK's pensions industry”. He added it would mean that the UK's retirement income would effectively all be channelled in the same direction.

“This is likely to stifle innovation within the pensions industry as there will be little or no competition and no impetus to develop creative solutions, which will effectively cause the industry to stagnate."

The president of the Society of Pension Consultants, Robert Birmingham, warned that the National Pension Savings Scheme, proposed by the Pensions Commission, might be the wrong answer to the wrong question in the debate on the future of UK pensions.

Investment Management Association chief executive Richard Saunders said: “The NPSS will need to be straightforward for consumers and employers alike, and will need carefully thought out governance arrangements.

“If properly structured, with an independent board and professional institutional fund management, it can be both a consumer champion and the most effective means of delivering the Commission’s objectives.”

Employers group the CBI said compelling companies to contribute to pensions “would jeopardise jobs and growth”.

Deloitte & Touche said some players in the investment industry could benefit from around £6bn of new NPSS funds a year. But it said compulsory contributions are likely to cost employers an extra £2.3bn pa.

The firm also said that the proposed 0.3% management fee could lead existing pension funds to ask why they are paying considerably more.

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