NEST alternatives
...SOME ARE ENROLLED IN DIFFERENT SCHEME(S) TO OTHERS...
than to some of the alternatives. l Investment choice is more limited within NEST than some alternatives. l There is not normally the ability to transfer a pension pot into or out of NEST, although there are exceptions e.g. in the case of pension credits on divorce. l The fact that NEST is open to all employers may be useful in view of the likely demand on pension providers over the next year or so.
What else can we all be in?
As mentioned above, some employers will already have pension schemes and their advisers will be able to assist with determining whether these are fit for purpose as auto-enrolment schemes or can be amended to make them suitable.
Employers who are looking at new schemes may also wish to consider the other options in the market.
Larger employers may opt for schemes which are specifically designed for them by firms of actuaries/employee benefits consultants. These could hypothetically be traditional defined benefit schemes (‘final salary schemes’) but are far more likely to be DC schemes. Smaller companies may wish to look at schemes offered by mainstream financial services providers, which will typically be group personal pension plans.
A number of pension providers specifically promote themselves as direct rivals to NEST, i.e. as multi-employer schemes that claim to have low charges, good governance and clear member communications. These include The People’s Pension and NOW: Pensions. Many large mainstream financial services providers also have offerings which qualify as auto-enrolment schemes. These include (but are not limited to) Aegon, Aviva, Legal & General and Scottish Widows. The Association of British Insurers maintains a list on their website of ABI members providing auto enrolment schemes. It is possible to segment the workforce so that some are enrolled in different scheme(s) to others (one of which could be NEST) and this may be appropriate in a number of circumstances, e.g. where an employer has a core group of long-term employees and a pool of workers who typically remain on the payroll for short periods (e.g. seasonal workers).
I need help! The Pensions Regulator’s website (
www.thepensionsregulator.gov. uk) offers comprehensive guidance on auto-enrolment, including the criteria for auto-enrolment pension schemes. Other good sources of advice depending on the size of the employer may be the employer’s accountants, independent financial advisers or employee benefits consultants/consulting actuaries. In all cases, employers will get the best results from taking as much time as possible to evaluate the choices open to them. It is worth bearing in mind that an estimated 38,800 employers
have staging dates in 2014 and a number of commentators have asked how well the financial services and advice sectors will cope with demand, so prudent employers will no doubt wish to maximise their options by planning early and shopping around for the best advice and services.
PP PayrollProfessional 31
Making Sense of Automatic Enrolment and Pensions
How would it be if someone could • help you make sense of Auto-Enrolment? • advise you on pension options for your employees?
m
Momentum Partners Financial Services Limited is a fi rm of Independent Financial Advisers with the expertise to help you comply with your Auto-Enrolment obligations AND advise on pension provision for your employees- whether via NEST or using other options.
Interested? Please contact Fiona Karlin on 01223 370160 or via fi
ona.karlin@momentumpfs.com
Momentum Partners Financial Services Ltd Independent Financial Advisers
Sheraton House, Castle Park, Cambridge CB3 0AX
www.momentumpfs.com
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