Head of pensions policy John Lawson says the company will use its existing processes and systems but strip it back as more of a self-service scheme. He says it may differentiate itself from Nest by offering free registration with the Pensions Regulator and facilities for employers to check they have made the correct contributions at the year-end.
Lawson says: “This is obviously something we are looking at and if we are going to compete with Nest anything we offer will have to be stripped down. It will not be the full five-star option, it will have to be largely self-service or with elements of assistance on our part.
“We already have the processes and the systems to offer that. At the moment, we tailor the scheme to suit the needs of that employer but this will be an off-the-shelf product.
“The biggest employers will go in first in 2012 and a lot of these will have schemes already. The competition will come in the middle market where employers do not generally have pension schemes. That will kick off around 2014.”
Lawson adds that Standard Life is steering clear of target date funds, which are favoured as the default investment option for Nest.
He says: “We think they are old hat. What we are looking at are funds that can achieve a reasonable exposure to equities but smooth the journey to the final destination so people do not have to take these unpalatable shocks.”
Money Marketing revealed in March that Aviva was planning to counter the threat of Nest on private pension provision by developing an offthe-shelf product to “compete head-on”.