The deadline is getting closer…
The National Employment Savings Trust (NEST) is due to launch in October 2012, little more than a year away. NEST is a Government-initiated default pension scheme, primarily aimed at low to medium earning employees who have no or very limited employer pension provision. NEST will be supported by auto-enrolment rules which, over the following three years, will place most tax-paying employees in the scheme if they are not enrolled in a suitable alternative pension arrangement offered by their employer.
In one form or another – the concept was originally called Personal Accounts – NEST has been in development for over five years. The first NEST framework legislation dates back to 2007. The auto-enrolment legislation followed in 2008, but the ACA’s ‘Survey of Smaller Firms’ Pensions’, published in January 2011, revealed that only one in five businesses employing 250 or fewer employees had budgeted for the associated contribution costs.
If your business has not yet fully considered the impact of NEST and auto-enrolment, now is the time to start. While the long phasing in schedule means it could be the second half of 2015 before some small employers come within the ambit of NEST and auto-enrolment, your employees could well be asking questions much sooner