The Government established NEST as a low-cost pension scheme to help deliver the auto- enrolment programme. However, the Committee believes that certain restrictions placed on NEST will create complexity for employers and will disadvantage some employees.
The Chair of the Work and Pensions Committee, Dame Anne Begg MP, said:
“By lifting these two key restrictions placed on NEST, the Government would remove barriers that might currently prevent employers from choosing NEST as their pension scheme, as well as making it easier for employees to bring together the other small pension pots they are likely to have. This will help reduce the multiple administrative charges that many people pay and help them to understand the total retirement savings they will have built up."
There are also three other sections to the report:
Reforming the State Pension Auto-enrolment is intended to form part of a package of Government measures which would also include reform of the State Pension system. This is likely to involve introducing a flat-rate State Pension, reducing the level of means-testing and enabling people to see clear benefits from retirement saving. The Committee urges the Government to proceed with its plans for State Pension reform without delay and introduce a Bill to this effect at the beginning of the 2012–13 parliamentary session. Ensuring pension schemes offer value for money The report highlights the difficulties and complexity employers and employees currently face in comparing the fees and charges applied by pension providers. The Committee welcomes the work that the National Association of Pension Funds (NAPF) is undertaking with the pensions industry to improve transparency and calls on the industry to establish a clear, accessible and universally-adopted model to allow the comparison of charges by the end of 2012. The report recommends that, from 2013 onwards, if some auto-enrolment schemes still have hidden charges, or charges that represent poor value for money, the Government should use its powers to intervene. Implications for employers Auto-enrolment will impose new costs and additional administrative duties on employers, and may be particularly challenging for small employers. The Committee considers that the Government has taken appropriate steps to minimise the impact on businesses though its gradual and flexible approach ("staging and phasing") to implementation. The Committee supports the Government's decision that auto-enrolment should apply to employers of all sizes. Exempting small employers would create significant complexity, as well as excluding many employees from the benefits of workplace pension saving.
Follow this link to read the full parliamentary press release
NEST FINALISES OPT-OUT PROCESS
28 March 2012
The National Employment Savings Trust (NEST) has finalised its opt-out process ahead of the introduction of auto-enrolment later this year.
Professional Pensions reports:
NEST member and market communications manager Matthew Blakstad said: "We are absolutely not trying to make opting-out hard.
CIPP Policy News Journal
12/04/2013, Page 260 of 362
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