National Employment Savings Trust chairman Lawrence Churchill has urged the pension industry to work in partnership with Nest officials to bring about improvements in employer provision.
At the National Association of Pension Funds annual conference in Liverpool last week, Churchill said the difficulties of rolling out Nest, which is being scrutinised by DWP officials following a three-month independent review of auto-enrolment, should not be underestimated.
He highlighted the “market failure” associated with pension provision for low to medium-earners, with 750,000 (58 percent) employers offering no provision. Of the employers that offer a pension, around 280,000 fail to match the Nest minimum requirements.
Churchill says: “The 2012 reforms aim to trigger a large increase in pension provision, roughly half of which is nothing to do with Nest but will lead to increases in existing provision. For some of the expanded market, Nest will be a natural supplier but for much of the market, it will not be. We aim to work collab-oratively with the industry to make sure employers get the service which suits them best for all parts of their workforce.”
He also hinted that Nest would adopt an ultra-low-risk investment strategy.