The tagline for PADA, or the Personal Accounts Delivery Authority, is ‘helping millions save for their retirement’ according to the business card of its UK chief executive, Tim Jones.

As mission statements and corporate aspirations go, it must be one of the most worthy around.

At present, 7 million UK citizens do not have any pension provisions in place and PADA aims to help change this from 2012.

As Jones puts it, retirement saving needs to be a normal, sensible activity in the UK as it is in countries such as Australia, Holland and Sweden.

In this sense, the real key is bringing about a social and cultural shift to make pension saving a standard practice.

In a meeting between CoreData and PADA in London, the latter was keen to set out how personal accounts will work.

From 2012, all UK employers will have to auto-enrol staff into a pension and contribute on their behalf.

One option for employers will be to use their existing pension plans, provided they reach certain minimum standards.

Another will be to use personal accounts, which will be set up as a DC pension with costs capped at 0.5% a year.

Run as a single, independent scheme under the control of a trustee company, that will buy in administration and fund management, personal accounts could eventually pass 2 million members and eventually £50bn plus in assets under management.

Some in the industry are concerned that personal accounts will distort the pensions market.

Not so, according to PADA, which sees personal accounts working alongside existing occupational pensions to fill gaps in the market that private sector providers find uneconomic to reach, such as small employers with low to moderate earners.

It is also important to note that the legislation will not allow pension transfers into personal accounts, or assets built up in personal accounts to be transferred out.

In addition, PADA is seeking ‘regulatory easements’ which would benefit all pension providers, such as allowing annual benefit statements to be delivered via a website, rather than in print.

PADA is currently in the middle of a tender exercise for the personal accounts administrator.

Denmark’s ATP, India’s Tata Consultancy Services, a consortium of Logica UK, International Financial Data Services and DST Systems and another team including US firm Great West Retirement Services are the final four in the bidding process.

Jones says avoiding ‘the winner’s curse’, where a contract is won with such a low price that the winner is unable to make a profit, will be important.