Pension Funds Insider

Pension Funds Insider brings the latest pensions news and industry insights; from investment and governance updates to new mandate appointments and pensions regulatory information.

NEST will be more popular than current predictions indicate

Wednesday, October 31, 2012

Image for NEST will be more popular than current predictions indicate

Atkin & Co, the pension scheme administrator and actuarial consultant, has today argued that the National Employment Savings Trust (NEST) could be a more popular choice than currently being predicted, particularly for smaller employers.

Chris Atkin, director at Atkin & Co, said today that as many smaller companies are likely to leave it late to instigate arrangements for auto-enrolment they may not have the time, inclination or resources to carry out proper due diligence on all the different auto-enrolment options. Without a proper process, such employers will be at risk if things go wrong and we may, therefore, see "a flight to NEST" as the safest option.

"Further to that," Atkin said, "alternative schemes, which unlike NEST, will not benefit from the status as the default Government option will be in a very competitive environment. As such, given a lack of resources and possibly know-how, we may see small employers selecting NEST in order to avoid potential miss-selling scandals and legal battles. Anything from lack of advice over options, the incorrect set up of the scheme or an inadequate reorganisation of the existing scheme could create issues by which members are let down."

Atkin continued: "As a result of all this, it is likely that NEST will become a much bigger player than is currently predicted as NEST may appear a much easier and safer option."

 

First published 31.11.2012