Speaking at Nest Live Spring 2013, which took place at the Royal Mint Court on Tuesday, Mr Jones acknowledged that the trust allows employees to meet their required duties but may not allow them to do what they want for their workers.
Addressing delegates at the conference, held in association with Financial Adviser, Mr Jones said: “Customer practice is that employers pay their higher-paid staff a percentage of total income often on basic pay and often an even higher percentage, so the package gets richer as the employee rises through the organisation. At a certain point the contribution cap on Nest gets in the way.
“Employers may well not be able to do what they want for their workers. Many people are using Nest alongside something else. We want Nest to be a simple scheme that can be used across the workforce as you wish, just like any other pension scheme.”
Mr Jones reiterated that Nest had called for the government to lift the restrictions, including the contribution cap of £4400 and the ban on transfers in and out of the scheme.
Naomi Cohen, head of market engagement for Nest, said the pension scheme was not involved in imposing contribution restrictions. She added: “We didn’t ask for these. This is something that has been put on us, so that’s why we are in discussions with the department for work and pensions on how it may choose to reconsider that.”
The DWP is reviewing its position on lifting the restrictions, which form part of the conditions approved by the European Union for the state aid of Nest, could give it an unfair advantage over providers that have not benefited from public funding.
Adviser view:
Philip Pearson, partner of Hampshire-based P&P Invest, said: “Nest will normally be offered to companies without occupational schemes so much of the time it will be targeted at low earners. This is by far the largest sector that don’t have any pension benefits at work and only a small minority will be disadvantaged by the cap. It’s otherwise a useful psychological target for people who wouldn’t otherwise save for retirement.”
Background Box
At the conference Nest also unveiled a new website designed to support employers and advisers through the auto-enrolment process. It will go live in May and includes information on employer duties, guidance on the preparation and online set-up of Nest, and information on key areas such as assessment, enrolment, contributions and opt outs.
