Nest: Why governance is so important for the success of auto-enrolment

Since 2012, 5m have been enrolled and there are 5m more to come. But success depends on more than just the numbers through the door.

Building up a worthwhile retirement pot means people not only need to start saving, but continue to do so throughout their working lives.

A critical element supporting that is building confidence in UK pension schemes. To help achieve this, good governance is essential.

Confidence in workplace pensions is essential for both employers and workers. Seven in 10 employers say they agree that every worker should have access to a workplace pension.

We are now producing our independently audited MAF report, to be published in the second half of 2015. It is important that governance initiatives are thorough, transparent and in accordance with best practice – and that is the lens through which Nest views its compliance

Many feel a responsibility to help their workers save for a comfortable retirement. They want to know that there are quality schemes on offer.

But for many workers, pensions are unfamiliar terrain. This is the first time some have saved for their later years. 

They may have been put off retirement saving by the reputation of pensions in the past.

‘Is my money safe?’, they might ask. ‘Are schemes acting in my best interests?’

These people want to know they are using a scheme with high standards that is looking after their money.

Robust and trusted

Governance initiatives like the Mastertrust Assurance Framework are crucial. They can signpost to employers and workers that a pension scheme has the right processes and controls in place.

In its voluntary code the Pensions Regulator set out what quality features were required from defined contribution schemes and last year we published our statement setting out how we deliver against those.

We are now producing our independently audited MAF report, to be published in the second half of 2015. It is important that governance initiatives are thorough, transparent and in accordance with best practice – and that is the lens through which Nest views its compliance.

After all, governance standards need to be not only robust but trusted. Only then will we continue to see rising confidence in workplace pensions, and the ongoing success of the quiet revolution currently taking place in UK pensions saving.

Helen Dean is chief executive at Nest