"This would mean employees do not need to inform their employer about their pension scheme details."
The paper proposes some form of 'clearing house', which would include a "central platform to support transfer/consolidation and unified data standards.
"Pensions dashboards will help with the latter and some of the dashboards' back-end system may help with the other components."
In large part this step has been inspired by other pension systems around the world, not least from Australia, which designed a new DC pension system 30 years ago, and has achieved A$3.5tn in assets.
This encourages members to save into a smaller number of larger pension funds, most recently through the introduction of 'stapling', whereby an employee automatically stays with their existing super fund when moving to a new employer.
What would a pension clearing house look like?
However, in the UK an initial hurdle is the concept of the clearing house and how this might work in principle.
In Australia, Superannuation, which is compulsory, is administered through the Australian Tax Office. The ATO supervises the single, national dashboard where Australians access and see all their super, consolidate it and move it around.
According to Faye Jarvis, partner at law firm Macfarlanes, trying to translate this automatically to existing UK institutions would be a non-starter: "HMRC is not set up for the Australian model, that's not something you can do quickly in a year."
To be fair to DWP, there is no mention of using HMRC in the consultation, and it has left the concept open to input.
Mike Ambery, retirement savings director at Standard Life, which is looking closely at pot for life, is foreseeing something similar to a bank clearing system.
Noting that, while conceiving the operational infrastructure needs a lot of work, he sees a system whereby "an individual will be able to say to their payroll, 'This is where I'd like my money to be paid into'. I will pay it wherever an individual says or default to where the regulator says".
However, the clearing house concept aside, it is the philosophy of pot for life itself that many people are objecting to.
Jarvis says: "I think there are concerns it removes the employer from the process. Employers will work to try and find what's the best scheme for their employees. There's a concern that employers might become disengaged with it."
The inertia that underpins the success of AE might itself be undermined, some argue, as the pot for life would need members to take a more active interest in where their pension money is invested.
It is that trusting relationship the employee has with the employer that makes AE work.
