The government has responded to its consultation on the draft National Employment Savings Trust (Amendment) Order 2018, and laid it before parliament on Monday.
The Department for Work and Pensions had sought views on whether its draft amendment relating to mastertrust Nest achieved the policy’s aim of facilitating the effective operation of the Nest pension scheme.
The DWP said the draft changes will allow participating employers to contractually enrol their workers into Nest, enabling those employers to consolidate their pension provision at the outset with one scheme.
The amendment will also require Nest Corporation to carry out research with scheme members and employers about the operation, development or amendment of the Nest scheme. This requirement will keep the operation in line with General Data Protection Regulation, according to the DWP.
The changes will further give Nest Corporation the ability to close member accounts that have zero funds if certain conditions are met. One of the five respondents suggested informing employers before doing so, but the government said it would not prescribe this.
“However, Nest Corporation has agreed to address this point when designing the processes nearer the time of implementation, consulting with their members and employers panels on the best approach,” it noted.
The draft changes also state that people can join the scheme in a bulk transfer with consent.
One respondent pointed out that there was no market failure in either contractual enrolment or bulk transfers with consent, which was the reason why Nest had been created and received government aid.
But the DWP said: “Contractual enrolment is simply a different mechanism of joining the scheme. Offering it is in line with what employers expect from a basic pension scheme and this facility is already offered by other providers.”
It added: “The bulk transfers ‘with consent’ joining event is a clarification, as the primary transfer restrictions were removed from the Nest pension scheme on April 1 2017. This change complements the right for Nest to accept bulk transfers without consent and facilitates the scope for Nest members to consolidate their pension savings into Nest.”
