Of interest to all employers considering using the National Employment Savings Trust (NEST) to fulfil their auto-enrolment duties is the confirmation from the Department for Work and Pensions (DWP) that the current contribution and transfer restrictions on NEST will be removed with effect from 1 April 2017.
The changes follow confirmation given by the European Commission in September 2014 that the removal of the contribution limit and the transfer restrictions are compatible with the state aid provided to NEST.
The consultation response also confirmed:
- in response to queries on the timing of the removal, the Government considers that the restrictions have worked to ensure that NEST focussed on its target market but now was the right time to put it on a “similar footing to other providers”; and
- NEST would not be subject to the majority of the minimum governance standards announced earlier in 2014 (for example, DC pension quality standards and charge-capping measures), as it is already subject to statutory requirements, referred to as “higher governance standards”.