NEST Corporation, the trustee of the National Employment Savings Trust (NEST) scheme, has been hit by an incidence of fraud, which has resulted in a loss of more than £1.4m.
The Corporation revealed in its 2012/2013 accounts that the fraud involved the diversion of payments to a supplier, and as a result it lost £1,446,000.
NEST Corporation insisted that no money was taken from the NEST Scheme or members' pots and has said that the Department for Work and Pensions, the police and other relevant regulatory authorities have been informed.
NEST Corporation chair Lawrence Churchill said: "One adverse event of significance during the year was the discovery of a criminal fraud against the organisation. We responded immediately and have strengthened our defences, although we are chastened by the experience.
"Steps to recover the losses are still ongoing; our approach is to vigorously pursue recoveries as long as the prospective returns exceed the costs involved."
Despite a number of "significant milestones" that NEST Corporation has achieved and listed in its accounts, its chief executive Tim Jones said he was "very disappointed" to report the news.
He added: "A series of actions to seek recovery of the monies, tighten our controls framework and review business processes across NEST Corporation have been undertaken.
"Given this event, I have asked the chair to remove me from consideration for any non-consolidated award for 2012/13."
As at the end of June 2013 NEST's assets under management were around £11m compared to £3.8m at the end of March 2013 and it is currently working with over 900 employers, 480 of which are in their first stages of auto-enrolment. NEST now has 275,000 members.
Jones said: "I am proud of what we've achieved this year – we have faced challenges and hurdles, but have delivered for members and employers.
"We won't always get everything completely right, but we continue to learn and evolve our services to ensure they meet the needs of employers and members."
First published 17.07.2013
monique_simpson@wilmington.co.uk
