N.E.S.T. is the acronym for the new National Employment Savings Trust.

Auto Enrolment

Between 2011 and 2017 all employers from the largest multi-nationals down to small firms which employ only a couple of staff will need to enrol employees into either a NEST or other qualifying pension scheme as a matter of course. This process will be known as auto enrolment. 

All employers will be compelled to :

• Make a contribution to the pension on the employee's behalf.
• Tell the employee about the pension.
• Deduct the contribution from their wages.
• Send their contributions to the Pension Company.

Starting from 2011, nearly everyone earning over £5,035 and over will have to be automatically enrolled into a pension by their employer.

Exemptions From Auto-Enrolment.

• Those under the age of 22. (though anyone from the age of 16 can ask to be enrolled and make qualifying contributions).
• Those over state pension age, but under the age of 75.
• Some people on short term contracts.
• Those earning less than £5,035pa
• Those working outside or ordinarily working outside the UK.
• People who are already in a qualifying pension scheme.

When Do You Have To Auto-Enrol?

There is a set 4 year timescale for auto enrolment, generally starting with the largest employers in 2012.

Smaller employers (those with less than 50 employees) will commence auto enrolment from March 2014. To find your staging (commencement date) please contact us, giving your PAYE reference number and we will be able to tell you your commencement date.

How Much Will You Have To Pay?

Date	Employer Pays	Total Required	Employee Pays Up To
Oct 2012 to Sept 2016	1%	2%	1%
Oct 2016 to Sept 2017	2%	5%	3%
Oct 2017 onwards	3%	8%	5%

 The total required can be made up from an entirely employer funded contribution or a mixture between employer and employee. The employees contributions will benefit from tax relief. These are minimum contributions, and the employer and employee can pay more if they wish - to a maximum NEST contribution of £3,600pa.

The £3,600pa contribution limit is only to NEST contributions, contributions to other pension schemes are subject to annual contribution limits. High earners are likely to have contributions restricted under the NEST scheme.

Some Important Information You Need To Know About NEST

1. It is an auto-enrolment pension
2. It requires compulsory contributions
3. £3,600 is the maximum annual contribution
4. It will have an annual management charge of 0.3% once set up costs are recovered.
5. It is likely to offer only a limited range of investment funds
6. It will be portable.
7. It will be regulated by the Pensions Regulator
8. NEST will not have an initial waiting period before employees can join
9. NEST is the new name for Personal Accounts.

Employers dont have to use NEST if you have an existing pension scheme which meets qualifying criteria. Please contact us to find out if your existing scheme meets requirements.

In many cases you might find that your existing Group Personal Pension or Group Sipp already meets the forthcoming requirements. The information regarding whether your existing pension scheme meets NEST requirements can be found in our action plan for employers pack.

Please contact Pension-Watch for to receive our free action plan for employers. Dont be an employer which fails to comply with these new proposed regulations. A fixed penalty of £400, followed by penalties of between £50 and £10,000 per day (dependent upon the size of your organisation).