PADA's chief executive Tim Jones, said the authority remained "very confident we will have a strong competition for the final contract", but Liberal Democrats minister Steve Webb said that Jones's assertions were "pushing it".
"One could be prepared to accept the argument that as we get closer to a conclusion, other bidders will drop out of the race, but for Jones to describe the continuing process as a ‘strong competition', with just two horses left in the race, is pushing it a bit," said Webb.
"It's critical that we get the decision right. I have seen through the tax credits computer system how much misery can be caused by bad administration."
Webb also criticised the Conservatives for not being clear how they would tackle the ongoing disquiet surrounding personal accounts (PA), a view compounded by the fact that shadow minister Nigel Waterson declined to comment on Logica's withdrawal.
Webb's views were supported by Clive Grimley, partner at Barnett Waddingham. "With only the Indian firm Tata and the US pensions administrator Great West Retirement Services left in it, it sounds like a two horse race to me," he said.
Grimley added that the recently announced delayed rollout of personal accounts and auto-enrolment may have contributed to Logica's decision. "The disconnect between PADA's only objective - to deliver the product - and the government's constant meddling with pensions is becoming increasingly obvious," he said.
"It is frightening that the long-term provision of pension benefits is left to the fugacious political whim of a small group of people that has a separate and well funded retirement promise."
One of the reasons suggested for Logica's withdrawal is the problems an administrator would face with the current opt out legislation. Rachel Vahey, head of pensions development at Aegon, said government predictions of a 25% opt out rate were "vastly underestimated" and suggested that pension contributions should only be added after the opt out period had expired.
