The National Employment Savings Trust (‘NEST’) is a defined contribution occupational pension scheme that was set up by the Government specifically for auto enrolment, with a likely membership of low to moderate earners. The Government has recognised that the pensions market has changed significantly since NEST was set up, most notably with the introduction of much more flexible ways of taking DC benefits introduced from April 2015. In light of this, the Department for Work and Pensions has issued a call for evidence in relation to a number of proposed changes to NEST which include:
- extending access to NEST so that membership is permitted outside an auto enrolment context – for example so that employers can contractually auto enrol their employees into it outside normal auto enrolment rules, and for NEST to receive bulk transfers where the relevant employer may not be participating in NEST;
- allowing NEST members a greater range of options at retirement – for example currentlyNEST members may take uncrystallised funds lump sums but not flexi-access drawdown. The consultation suggests that widening NEST’s offering may be suitable for some members of other schemes and so the DWP is exploring the implications of allowing access to NEST solely for the purposes of using NEST’s retirement options.
The call for evidence closed on 5 October 2016, and the outcome of this consultation may be of wider interest than just to employers selecting their choice of auto enrolment vehicle. We will be monitoring developments in this regard.