Following the results of the Work and Pensions Committee to remove the contribution and transfer restrictions on NEST, Lee Hollingworth, Head of DC, Hymans Robertson, commented:
“The select committees recommendation to remove the contribution and transfer restrictions currently placed on NEST is entirely sensible. This is a critical time for NEST as it attempts to secure new client wins, the current rules place them at a competitive disadvantage compared to all other DC providers. There has never been a strong rationale for having the current restrictions and many employers we have been working with have discounted NEST as an option due to these limitations. The auto-enrolment pension reforms will benefit from having a successful NEST proposition serving the market.
We feel that the call for greater transparency in respect of member charges is a bit of misnomer – in our experience the majority of DC schemes have already moved to a mono-charge basis operating as a percentage charge deducted from the members fund. Competition between providers means that there has never been a better time to re-negotiate terms. We also now have a recognised industry benchmark set by NEST at an equivalent charge of 0.5% per annum levied against the members fund.”
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