NEST (National Employment Savings Trust) is the name given to a pension scheme designed to help employers meet their auto-enrolment pension duties.
The Pensions Act 2008 introduced new duties for employers to provide access to a workplace pension scheme for most workers. The new auto-enrolment pension reforms began rolling out in October 2012.
Businesses with more than 250 employees already have to be compliant, smaller businesses are in the process of enrolling their workers, and all businesses will have to comply by February 2018.
Employers do not have to use NEST to comply but they do have to automatically enrol eligible employees into a qualifying pension scheme. NEST pensions are run by a non-departmental public body that operates at arm's length from the Government and is accountable to Parliament through the Department for Work and Pensions (DWP).
In order to comply with the new pension reforms, employers will have to:
- Provide a qualifying pension scheme
- Automatically enrol eligible employees
- Pay employer contributions
- Tell all eligible employees that they have been automatically enrolled and that they have the right to opt out
- Register with the Pensions Regulator and provide details of their pension scheme and the number of people they have enrolled.
NEST pensions are designed to accommodate these requirements.