NEST Pensions: NEST and auto-enrolment options for employers

Register now for your free NEST Strategy Pack - emailed to you within an hour

Pensions reform is likely to impact every employer in the country, and the impact of auto-enrolling staff into a pension scheme could be significant. As such, gaining an understanding of how this far-reaching new legislation will impact on your organisation is likely to be business critical.

Firstly, it is important for people to understand that there is no NEST obligation – there is an auto-enrolment obligation.

You do not need to use NEST, you may already have a pension scheme in place that will meet your obligations, and  NEST has limitations in some key areas which may make it unsuitable for your company.

However, the NEST pension scheme itself will be available to all, and will provide an extremely attractive option for many.

TISCO Financial Planning Limited has no affiliation with NEST Corporation, the body responsible for the running and overseeing of the NEST Pension, nor is it authorized by, associated with or sponsored by NEST Corporation. [NEST Corporation's website can be found at www.nest.org.uk]

Understanding the possible increases in costs, when they will arrive and how to manage them should be part of current business planning.

If you have a scheme in place and pay reasonable contributions, then the changes are likely to be largely in communication and engagement, as well as administration. However, if you have a good scheme, but low take-up, you need to consider the impact of this on your costs.

For those of you without a scheme, the changes are going to be very large and need to be carefully considered. Once you have calculated who will need to be auto-enrolled, and when, you can start to look at costs and how to manage them. Planning ahead, and looking at this issue early should be a key consideration.

The first step for all employers is to understand whether the Governments new Pension Reform strategy and from 2012 in particular the phasing in of the National Employment Savings Trust (NEST), will have any effect on them at all. It is possible that your existing pension scheme will be a “qualifying workplace pension” and will exceed the NEST requirements, in which case only relatively small changes to admin (such as auto enrolment) will be required. On the other hand significant changes may be required. It is likely that a scheme exemption test will be introduced to allow employers to determine this.

Details on the exact requirements of this test and the criteria to ensure your scheme is a qualifying workplace pension are still not finalised. We are constantly monitoring developments and will be producing a NEST Strategy Pack for employers in due course.

If you would like to receive a copy of this pack, FREE of charge and without obligation please register your details below and we will email it to you. The pack will include information on the steps necessary to adjust to the new system. Once you have this information you are free to act independently of if you prefer one of our advisers can then work with you to plan a strategy to cope with, or even benefit from their introduction.

Registration is free and you are under no obligation to act on or follow our findings. For queries or further information please contact us.