Proposals by the government to alter retirement plans, including creating a “pot for life” concept and consulting on expanding the U.K. lifeboat fund’s remit, were met with mixed reaction by the industry.

Chancellor of the Exchequer Jeremy Hunt on Nov. 22 outlined his Autumn Statement — the government’s latest tax and spending plans — with a proposal to allow participants to divert their contributions to a retirement plan of their choice.

The government is launching a call for evidence for defined contribution plans on a “lifetime provider model to simplify the pensions market by allowing individuals to move towards having one pension pot for life, and on a potential expanded role for collective DC schemes in future,” a notice on the government website said.

However, the proposal was not welcomed by the industry. Laura Myers, partner and head of DC and financial well-being at consultant Lane Clark and Peacock, said in emailed comments that the proposals “risk undermining” the current system, which “delivers high quality and low-cost workplace pensions to millions of workers.”

“At present, employers act on behalf of their entire workforce, benefiting from competition from pension providers, and negotiating a good deal for high and low earners alike. In a ‘pot for life’ system, the pensions industry will inevitably seek to ‘cherry pick’ high earners, whilst ordinary savers get left behind,” Myers warned.

Mike Smedley, partner at advisory firm Isio, said the concept “is going to revolutionize pensions in ways we haven’t yet imagined. It will change the dynamic between employers and employees and the consequences are uncertain.”

He said the chancellor had “headed to the outback” for his ideas, citing the Australian concept of super funds and participants choosing their provider. “The big difference is we have thousands more schemes than Australia does, and the U.K.’s pensions landscape is much more complex,” Smedley said. “The pensions industry and employers aren’t ready for this yet.”

There are potentially two side effects, according to Russell Wright, senior vice president of consultant Redington’s defined contribution team. One is good: that giving participants control to choose means “providers will be directly incentivized to offer better service — both to retain customers and to ‘win’ them from other providers,” he said in emailed comments.

But the not-so-good outcome is the risk that participants make poor decisions. “They could swap a good value workplace scheme for one that has higher charges, inept support and limited investment opportunities,” he said.

Hunt also outlined proposals to drive consolidation in the U.K. retirement market, announcing that the government will consult this winter on how the Pension Protection Fund, London — the U.K.’s lifeboat for the plans of insolvent companies — can act as a consolidator for defined benefit funds that are “unattractive to commercial providers.”

Isio’s Smedley said the PPF as a public sector consolidator “is unnecessary and could take years to come into operation. We already have a number of innovative consolidation approaches developed by the industry that already function well and are delivering the benefits of consolidation; improving the quality of governance, investment efficiency and member experience. We should be supporting these as an industry rather than waiting for a national scheme to emerge,” he said.

An emailed comment said the PPF welcomes the government’s commitment to establishing a public sector consolidator by 2026, believing such a move “can help deliver the government’s objectives and complement existing commercial solutions. As the government has recognized, we would be well placed to take on this additional and separate role.”