The company argued that its pension was among the easiest to understand, had clear charges and involved no foot-in-the-door sales tactics.
Its new product comes ahead of a report tomorrow by the Personal Investment Authority, the regulator, which will examine the effect of company charges and expenses on financial products.
The PIA report is expected to show that in the two years since rules were introduced to force greater disclosure of charges, their impact has been limited.
Eagle Star's pension comes in the wake of a series of similar product launches, mostly aimed at a growing number of people who prefer to do business by telephone.
The company will charge a fixed pounds 2 a month on the fund itself, plus an annual management charge of 1 per cent. Unlike other firms, which operate a so-called "bid-offer spread" of charges of about 5 per cent, all contributions are immediately allocated to the fund. Both these innovations are identical to those on offer from Virgin Direct, the growing financial services empire owned by airline tycoon Richard Branson.
Martin Campbell, product development manager at Virgin Direct, said: "It is good to see so soon after our pension was launched that other companies are trying to compete with us."
Eagle Star breaks new ground, however, by promising potential policyholders that if in the first two years they are unhappy with the pension, it will transfer the money to a pension scheme of their choice, without charge.
Steve Roberts, director of Eagle Star's new operation, said: "The personal pensions market has for too long been haunted by the dual problem of unclear charges and a high drop-out rate in early years.
"Our guarantee, together with the freedom to suspend contributions without penalty, means that early-surrender problems should be a thing of the past."
Eagle Star's launch reflects its determination to reclaim the initiative after several years of sluggish financial sales. The company recently installed a pounds 55m computer system. It has also cut staff by 30 per cent to about 1,500 people.
The company hopes to attract consumers jaded by traditional hard-sell tactics or opaque products and increasingly attracted by cheap, no-frills financial products.
Other companies to have entered the market include Scottish Widows, which saw telephone-based sales account for more than 20 per cent of its pension premium income last year.
The new launches aim to compete with Equitable Life, which has for many years offered some of the cheapest products on the market.
Its pension has no monthly fee and, although it imposes a bid-offer charge of between 4.5 and 5 per cent to meet setting-up costs, the annual management charge is 0.5 per cent, half the rate that Eagle Star imposes on its new pension.