Key points
- The national employment savings trust (Nest) is designed for employees who are not currently saving into a workplace pension.
- Nest has a public service obligation to accept any employer that wants to use it to meet its workplace pension duties.
Employers can use the national employment savings trust (Nest) in various ways as a cost-effective vehicle to help them meet their new workplace pension duties, says Tim Jones
Automatic enrolment is moving up the priority list, both for employers and those responsible for supporting their pension decision-making.
Supporting all employers, large and small, in making their choices will involve assessing a range of features of any new or existing pensions arrangement, including understanding the ease of administration, the way the scheme communicates with members, and its investment approach.
The national employment savings trust (Nest) has been set up to provide a scheme that any employer can use to meet its new workplace pension duties. Nest will give many organisations and their workers access to a low-charge pension scheme for the first time. The scheme is designed for workers who are not currently saving in a workplace pension scheme.
Like other trust-based workplace pension schemes, Nest is run on a not-for-profit basis. That means there are no shareholders and it has a legal duty to act in the interests of its members.
Nest is already working with more than 140 employers that want to use the scheme early. Many of the employers we are working with are putting in pension arrangements and getting ready for automatic enrolment many years before they have to, which is really encouraging.
We are also working closely with many other employers that want to use Nest for pensions auto-enrolment when the duty applies to them.
Employers can use Nest in different ways for different workers, for example: as a sole scheme for an entire workforce; for a particular group of workers alongside another scheme already in use for a different category of workers; as an entry-level scheme where an existing scheme is not immediately available; and as a base scheme to ensure compliance with the new employer duties, while using another scheme to pay in additional contributions.
We aim to ensure Nest is easy to use no matter which way an employer decides to use it, and that all members can expect a straightforward, empowering experience.
Employers can use Nest to pay minimum contributions, but can also pay more as long as the total paid into a member’s retirement pot in any tax year does not exceed Nest’s annual contribution limit (£4,400 for the 2012/13 tax year).
Nest members have one retirement pot for life. They keep it with them until they take their money out and can keep contributing to it whether they change jobs, stop working or become self-employed. This means no ongoing administration for employers when workers who are members of Nest leave their employment.
Nest’s other features include an investment approach specifically designed for the needs of members.
To find out more about Nest and how it can help you get ready for automatic enrolment, get in touch.
Tim Jones is CEO at Nest Corporation
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