Lining your NEST (National Employment Saving Trust) More information is coming in concerning the introduction of NEST, which is promising to be the biggest shake-up to pension provision since the introduction of Stakeholder Pensions. The main aspects now are when might an employer be affected and what pension provision needs to be made. The first aspect is known as a 'Staging Date' which is the date that employers will be required to comply with the new Compulsory work place pension regulations (NEST). For most employers with less than 50 eligible employees the 'Staging Date' will be 1st February 2016. For other employers it could be as early as 1st October 2012 (just one year away). The Pension Regulator will write to employers one year before their official staging date. Employers can bring forward their staging date or other scheme to prepare early or to fit in with other business issues such as the trading year end but you must select one of the official dates. Once you have your 'Staging Date' you will need to do one of two things:1. Set up or modify a private staff pension scheme 2. Enrol staff in the Governments NEST scheme (a national scheme) Clearly there will be obligations on the employer to administer a pension scheme correctly. The other aspect is what will Employers & Employees have to contribute and all employers should start budgeting now. Each time an employer makes a contribution they will have to ensure that it meets the minimum requirements as earnings may change. The minimum levels will be phased in over five years from October 2012 (or later staging date) as shown in the table below. Date
October 2012 to September 2016 October 2016 to September 2017 October 2017 onwards
Minimum Employer 1% 2% 3%
Minimum difference to be made up by employee (gross) 1% 3% 5%
Total minimum 2% 5% 8%
(with grateful thanks to Elaine Birch of Grosvenor Birch Ltd for providing the background information for this)