A top UK fund manager has criticized the UK Pensions Commission's proposals for a National Pension Savings Scheme (NPSS) on the grounds that it risks 'renationalization by the back door', according to a newspaper report.

Peter Butler, chief executive of Governance for Owners, joined the attack on NPSS in an article in the Guardian newspaper. Mr Butler is particularly concerned at the power that NPSS would have as a shareholding body in UK companies.

He made reference to similar savings funds in Norway, Germany and New Zealand (whose ‘Kiwisaver’ Lord Turner’s NPSS is loosely based upon), arguing that such mega-funds wield tremendous power because of the sheer quantity of money they can invest. However there is, as yet, no need for them to comply with established corporate governance rules.

Once politicians wake up to the power they could have it would be like nationalization by the back door, the newspaper quoted Mr Butler as saying.