Welcome to our first NEST advisers newsWe’ve introduced this newsletter in response to requests from advisers for more regular updates about NEST and automatic enrolment. You’ll receive this instead of NEST news from now on.

Every month NEST adviser news will include guides, technical articles, investment updates, FAQs and useful hints and tips about ways you can use NEST.

Automatic enrolment is bringing big changes to the workplace pensions landscape. Choosing, getting ready for, setting up and managing a workplace pension scheme is a lot to do and all employers have a deadline to work to. We hope that NEST adviser news will help you understand the new duties for employers and the ways you can use NEST to help your clients.

We’re also keen to hear your suggestions for content to include in future editions. So if there’s anything you think we can do to help you help your clients, please email intermediaries@nestcorporation.org.uk with your ideas.

Hot off the press – NEST is launching monthly workshops for intermediariesNEST’s new Adviser open house is due to launch soon. It’s a series of monthly workshops designed especially for advisers and other intermediaries who want to explore the new business opportunities of automatic enrolment.

The workshops will give you an overview of what the new employer duties are and look at the related new business opportunities and services you can offer your clients, such as managing their online accounts for them if they choose NEST.

We’ll review important points around scheme compliance and explain how to manage employers’ and members’ online accounts on their behalf using our delegated access facility.

All the workshops will include an investment update, employer case studies, a question and answer session and useful information about how NEST can help.

To register your interest email us at events@nestcorporation.org.uk

Useful tools – Advisers’ guide to NEST Don’t miss out on our new guide for advisers, which explains NEST’s key features and provides more in-depth investment coverage than our employer-facing material. It reflects the key issues that advisers will want to understand before they can recommend NEST to their clients. It’s here to help you get to grips with what NEST aims to do and how it works, covering:

a detailed outline of NEST’s unique features

NEST’s charges and how they work out for members in the long term

a comprehensive guide to our investment approach

the different ways NEST can fit into a solution and work with other pension schemes.

To find out more read our new Advisers’ guide to NEST

NEST advisernews

February 2013

NEST adviser news

Technical tip – using postponementEmployers can choose to postpone automatically enrolling their workers for up to three months from their staging date. This is the date employers’ automatic enrolment duties first apply, based on the size of their organisation.

The Pensions Regulator (TPR) notifies each employer of the date that applies to them. If an employer chooses to postpone, they must inform their workers in writing.

Employers can also use a ‘postponement period’ for any workers newly eligible for automatic enrolment, for example new starters or workers whose pay has moved above the automatic enrolment threshold. This would be a period of up to three months from the date the worker started or first became eligible.

To find out more about postponing automatic enrolment read TPR’s guidance in this fact sheet

This month’s FAQ – how do you compare NEST’s charging structure against a straight AMC?Members of NEST pay a combination charge made up of two parts. Together they’re broadly equivalent to a 0.5 per cent annual management charge (AMC) - a typical low charge in larger workplace pension schemes. There’s no charge for employers to use NEST and no charge to members for switching funds or changing their NEST retirement date.

The first part of NEST’s charge is an AMC of 0.3 per cent on the total value of a member’s fund each year. The second part is a contribution charge of 1.8 per cent on each new contribution into a member’s retirement pot. Over time an AMC has a much bigger impact than a contribution charge on the amount of charges paid because contribution charges only apply once when new money is paid into a member’s pot.

The differences between NEST’s charge level and a scheme with a 0.5 per cent AMC are small. Many types of saver would be slightly better off with NEST’s charge level than they would be with a 0.5 per cent AMC, although some savers who are closer to retirement may have marginally worse outcomes.

We’re hoping to reduce our charges further in the future by getting rid of our contribution charge. Once we pay off the loan from the government that covered NEST’s set-up costs, we’ll be able to lower our charges by removing the contribution charge.

To find out more read Low charges for future members of NEST

February 2013

NEST adviser news

Employer case study Financial advisory firm Lighthouse Group has been using our delegated access service since 2011 to help their clients use NEST. It started recommending NEST to its clients after looking into the workplace pension scheme options available. It decided that NEST was the pension scheme that best suited many of its clients’ needs.

The features that convinced Lighthouse Group that NEST was the right choice for many of their clients include our low AMC, the fact we take on businesses of any size and that we provide a flexible delegated access facility that’s easy to use.

To find out more read the full case study on Lighthouse Group

Every month we’ll feature a new case study, looking at how employers and advisers are using NEST.

If you’d like to share your own case studies please get in touch at intermediaries@nestcorporation.org.uk

Spotlight on investment – lifestyling in DC schemesNEST’s investment approach is based on extensive research into the likely profile of savers who’ll be brought in by automatic enrolment. The default option for NEST members is our range of NEST Retirement Date Funds.

These innovative single year target date funds are lifestyled across three distinct phases. Each phase has a specific objective that focuses on the needs of the member at different times of their savings career. These phases are Foundation, Growth and Consolidation.

Growth is the longest phase and the engine room of our approach. The Foundation phase is aimed at new savers in their 20s and the Consolidation phase is for members who are nearing their retirement.

As members move through these phases we adjust the underlying investments to match their changing circumstances. We also dynamically manage investment

risk in reaction to market moves and economic situation. It’s not a ‘set and forget’ strategy - it evolves and adapts in line with members’ needs, without them having to do anything.

All newly enrolled members are assigned to a NEST Retirement Date Fund that matches their State Pension age or age 65, depending on their date of birth. However, members can choose to move into a different NEST Retirement Date Fund if they want to at no extra charge.

We also offer a range of other funds members can choose from if they don’t want to stay in the default option. Again, it’s free for them to do this.

To find out more read the relevant section in our new Advisers’ guide to NEST

Your feedback – fund factsheetsThis section of the newsletter is our opportunity to get your views on some key issues. In each edition we’ll ask questions, request feedback and publish some of the comments received.

This month we’d like to get your opinion on customising NEST’s fund factsheets for your clients. You can have a look at the available options here

Do you have a view of which sections are most useful?

What information would you like to share with your clients on a quarterly basis?

Please give us your feedback at intermediaries@nestcorporation.org.uk

Our newsletter returns at the start of March, until then all the best from the team at NEST.

In this newsletter we use the term NEST to refer to both NEST Corporation and the scheme.

© NEST Corporation 2013. All rights reserved. This information doesn’t constitute financial, investment or professional advice and shouldn’t be relied on. We don’t give any undertaking or make any representation or warranty that this document is complete or error free. We don’t accept responsibility for any loss caused as a result of any error, inaccuracy or incompleteness. Any form of reproduction of all or any part of the information in this document is not allowed.

February 2013

To find out more visit our website nestpensions.org.uk

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