The National Employment Savings Trust (NEST) will not provide a gateway to the selling of protection products, according to think tank Reform.
The body also warned that the coalition's flagship Universal Credit welfare benefit reform will fail despite its significant support within the both parties in government.
Speaking at the Actuarial Health and Care Conference, Dr Patrick Nolan chief economist of Reform, explained that unlike other similar projects around the world, NEST does not involve the private sector as a default operator.
"The government hopes that auto enrollment into pension schemes will help with a workplace savings culture," he said.
"That is absolutely the right thing to be doing but I worry about the implementation, particularly why the default provider is NEST and not the private sector.
"If that happens a lot of the benefits we're hoping to generate won't come through because people won't be auto enrolled into private sector schemes which will mean the industry will not have a relationship with them.
"Those people the industry has a relationship with will be more likely to take up other products and there will still be this ring fencing of particular products," he added.
Dr Nolan noted that both New Zealand and Australia utilised the private sector as default providers for pension funds.
"So I do worry about the private sector. There's no real incentives to think about offering these people different products and we're not restoring those relationships."
He also voiced fears that no matter how well intentioned the government's Universal Credit benefit payment was, it would be too complex to implement and that other similar schemes around the world had failed.
"I really want to believe that the Universal Credit will work but the problem is it fails on two simple tests; it won't work in practice and its not value for money," he said.
"Its an old idea that hasn't worked when tried overseas, New Zealand has tried this for 20 years and not got it done.
"And this country doesn't have a great record when implementing large public sector IT projects so I doubt the IT system will be able to deal with this as it will be dealing with some of the most complicated families in the country," he added.
Dr. Nolan concluded by noting concerns about how the complexity would be ironed out and around how the transition period would work for claimants.
