Nest charges announcedMonday, November 29th, 2010
The legislation governing the introduction of automatic pension scheme enrolment from 2012 provides for the establishment of a statutory pension scheme that may be used by employers to meet their statutory obligations. The scheme is known as the National Employment Savings Trust, or “NEST” for short.
NEST will operate with two charging elements: an annual management charge of 0.3% and a contribution charge that was expected to be around 2%.
The NEST Corporation, the trustee body of NEST, is responsible for setting the charging level and it announced on 24 November that the charge on contributions will be 1.8%. The charge on contributions will cover the initial set-up costs of NEST.
Separately, the NEST Corporation announced that it had confirmed its long-term contracts for
- fund administration services with State Street Corporation. The contract runs until 24 October 2020, with the option to extend for up to five years beyond that. The fund administrator manages the movement of members’ contributions from the scheme administrator to the appropriate fund managers, according to NEST’s investment strategy.
- administration of the pension scheme with Tata Consultancy Services until 30 June 2020, with the option to extend for up to five years beyond that. The contract covers all aspects of scheme administration, including web-based enrolment, record keeping, contribution collection and details of each individual’s retirement pot.