You may have recently seen the TV adverts for the National Employment Savings Trust (NEST), Workplace Pensions, starring UK business leaders exclaiming that “They are in!”. The truth is they have little if any choice in relation to NEST.
For employers who remember the damp squib that the Stakeholder Pension Scheme of 2001 was should be not believe that NEST will be the same stillborn entity that Stakeholder Pensions were. NEST is here to stay with a suite of fines for those who choose to ignore it and unlike Stakeholder these fines will be imposed on those who disregard their duties.
The National Employment Savings Trust (NEST) is the biggest change to UK pension legislation since the State Pension was introduced in 1908.
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NEST is a new type of pension scheme that will affect both employers and employees from October 2012. It is designed to offer a pension solution for all employees and employers in the United Kingdom that do not already have a suitable company pension scheme. It is important for those employers that already have pension schemes in place for their employees to realise that their existing schemes may not meet the employer duties as defined by NEST it would therefore be advisable for current schemes to be reviewed.
The NEST scheme will be rolled out, for most companies, from October 2012 to 2015, starting with the largest companies first and working towards the smaller companies.
Employers will simply have the choice of offering their employees a suitable private pension or the Government NEST scheme.
Both employees and employers will have to contribute to the scheme. The initial contributions will start with 1% of salary being contributed by employee and employer at the outset. Contributions will increase so that by 2018 employees will be contributing 5% of salary and employers 3%.
Further information can be obtained by following this link to the NEST website.
We can offer expert pension advice and would be happy to discuss how NEST may affect you and your company and whether NEST or a private pension scheme would offer the best solution to you and your employees.