© NEST Corporation 2012. All rights reserved. Welcome NEST roadshow.

© NEST Corporation 2012. All rights reserved.

WelcomeNEST roadshow


IntroductionRoy PorterAssistant director, distribution

#nestontheroad


AgendaNEST- we’re readyRoy Porter

Getting ready for automatic enrolmentNigel Pettinger

Choosing a suitable investment approach for automatic enrolmentMark Fawcett

Break

Five practical steps to get started with NESTNigel Pettinger

NEST’s approach to communicationMatthew Blakstad

A recap of what employers need to doRoy Porter

Q and A session


How NEST can be usedOffered to all workersSole

scheme

For a particular group of workers

To sit alongside existing scheme already in place for a different group of workers

Where the existing scheme has a waiting periodAs an entry level scheme

As a base scheme

Where minimum contributions are made for all workers, using another scheme to ‘top up’ contributions

Letting employers keep their existing voluntary scheme(s) while being sure they’ve got their duties covered

As an automatic enrolment scheme


What NEST offersWe’ve got it covered

We’re designed for automatic enrolmentNEST retirement date funds that are right for most workersSharia fund, ethical fund, and different risk options at the same low chargeStraightforward approach for membersSophisticated risk management, investment and governance designed for good member outcomesInternational expertise throughout the supply chainPots that travel with the member when they leaveClear communicationsComprehensive support through our website and UK-based contact centre


What NEST offersWe lighten the load

Plain language NEST-ready templates for communications to workersNEST-designed decision trees, tools and explanatory guidesPreset contribution levels and enrolment types to make compliance simplerElectronic opt-out by web or telephone that reduces costly paper processesAll NEST administration tasks can be delegated to third party or internal specialists


Looking at the numbers


The staging process. How big and how many?

Oct-1

2

Dec-1

2

Feb-

13

Apr-1

3

Jun-

13

Aug-1

3

Oct-1

3

Dec-1

3

Feb-

14

Apr-1

4

Jun-

14

Aug-1

4

Oct-1

4

Dec-1

4

Feb-

15

Apr-1

5

Jun-

15

Aug-1

5

Oct-1

5

Dec-1

5

Feb-

16

Apr-1

6

Jun-

16

Aug-1

6

Oct-1

6

Dec-1

6

Feb-

17

Apr-1

7

Jun-

17

Aug-1

7

Oct-1

7

Dec-1

7

Feb-

180

20,000

40,000

60,000

80,000

100,000

120,000

140,000

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Number of employers Number of workers

Over 120,000 employers

with <30 workers

17 employers with

>120,000 workers

Over 12,000 employers

with >90 workers


PAYE schemes – Oct 2012 to Feb 2014

-

500

1,000

1,500

2,000

2,500

3,000

3,500

These figures are from the Pensions Regulator and reflect the number of PAYE schemes not the number of employers. Employers may have more than one PAYE scheme.


PAYE schemes – Oct 2012 to May 2015

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

These figures are from the Pensions Regulator and reflect the number of PAYE schemes not the number of employers. Employers may have more than one PAYE scheme.


Preparing to joinWe have been thinking about the path an employer has to take before joining a scheme such as NEST.

Ready to join

Employer with no knowledge of

duties

Understanding duties

Knowing how it will comply

Prepares processes


Nigel PettingerDirector of customer services

Getting ready for automatic enrolment

#nestontheroad


Employer journeyFirst, employers need to understand what they need to do to meet their duties. TPR’s guidance will help them do this. You can find this at tpr.gov.uk

Then get ready to use NEST. Follow our five practical steps to get started.


DWP’s staging and phasing plans

Oct 2012

Feb 2014

Apr 2014

Apr2015

Jan 2016

Employers with 250 or more

staff

Employers with 50 to 249 staff

Employers with 30-49 staff

Employers with fewer

than 30 staff

Aug2015

Oct 2015

April 2017

Sta

gin

g

1 per cent employer contributions2 per cent employer

contribution

3 per cent employer

contribution

Oct 2017

Oct 2018

Phasi

ng


Employer duties - who qualifies for what?


Employer journey


Understanding what employers need to do Know the timelines – staging dates

Understand the regulations – TPR guidance

Get to grips with their legal duties

Set up their project team – including payroll

Assess their workforce structure

Review their current HR/payroll processes


How to assess the investment approaches of schemes

How to assess the investment approaches of schemesMark FawcettChief Investment Officer

#nestontheroad


Does the default approach have a high level objective?

Guidance checklist

Does the investment strategy and asset allocation take account the needs of members?Are members protected from the risks associated with investment?

Are members locked into the default or are there other options?

Does the default approach have a high level objective?

Does the investment strategy and asset allocation take account of the needs of members?

Is the default approach in line with guidance?

Are the charges appropriate and are they clear to members?

Are members protected from the risks associated with investment?

Are members locked into the default or are there other options?Are the charges

appropriate and are they clear to members?


NEST Retirement Date Funds – unique single year target date funds

NEST 2058 Retirement

Fund

NEST 2039Retirement

Fund

NEST 2022Retirement

FundUBSGlobal equity

Growth seeking assets

Income seeking assets

BlackRock

Diversified beta

BlackRock

Sterling cash

SSgaGilts

SSgaIndex-linked gilts

RLAMUK

corporate bonds

Other asset

classes


Growth phaseApprox 30 years

Target CPI +3 per cent (after charges)Maximise performanceSensitive to extreme shocksRisk appetite and risk capacity – mediumRisk need – high

Foundation

phaseApprox 5

years

Outperform inflation (after charges)Reduce impact of extreme shocks

Foundation

phaseApprox 5 yearsOutperform

inflation (after charges)Reduce impact of extreme shocks

3%

21%

24%

8%

44%

Growth phaseApprox 30 years

Target CPI +3 per cent (after charges)Maximise performanceSensitive to extreme shocksRisk appetite and risk capacity – mediumRisk need – high

NEST Retirement Date Funds - objectives

Target investment returns well in excess of inflation after all charges over the long term

Track annuity pricesMinimise chance of losses late in the journey

Consolidation phase

Approx 10 years

Equity

Property

Corporate BondsOther Fixed Income Assets

Cash

2%

26%

29%14%

29%


NEST Pre- Retirement

FundNEST Lower

Growth Fund

NEST Higher

Risk FundDiversifiedLifestyledLow cost

NEST Retirement Funds – appropriate choice

NEST Sharia FundLow cost

NEST Ethical Fund

DiversifiedDynamicLifecycled


Investment advisers

BlackRock

Sterling cash

SSgaGilts

SSgaIndex-linked gilts

UBSGlobal

diversified equity

BlackRock

Diversified beta

RLAMUK

corporate bonds

NEST Investment Committee

Fund administrator – State Street Corporation NEST 2058

Retirement FundNEST 2039

Retirement FundNEST 2022Retirement

Fund

MSCI BarraRisklab

Co-operative Asset

Management

Strong governance and world class partners

NEST’s in-house

Investment Team


What members see...Straightforward enrolment experience

NEST Retirement Date Funds

Focussed NEST Fund Choices

Clear communications without overwhelming

Same low charge across all funds

Multi phase investment, targeting different risk and return objectives

Dynamic and sophisticated risk management - designed to succeed in all economic conditions

High levels of governance and clear alignment of interests

And under the bonnet...


...So, what does all this mean for member outcomes – a stochastic model view


Performance to dateStayed well within our risk budget – if at the lower endReduced the volatility and some of the significant down sidesAre on track to meeting our longer term return objectives

NEST 2055 Retirement Fund



UK CPI

Global Developed Market Equity*

*FTSE All World Developed Total Return index

Jul-11 Aug-11

Sep-11 Oct-11 Nov-11

Dec-11

Jan-12 Feb-12 Mar-12 Apr-12 May-12

Jun-12 Jul-12 Aug-12

-12

-10

-8

-6

-4

-2

0

2

4

6

8


How NEST’s Retirement Funds help employers and workersFeels personal and tailored regardless of ageAiming for consistent outcomes over time

Sophisticated risk management approach

Clearly labelled funds and investment communications

Workers less likely to approach their employer for guidance Feels fair, so workers less likely to complain or be disillusioned Fewer concerns from workers, particularly in times of economic stress

Workers reassured and empowered to find out more if they want to – employers spend less time on queries

NEST Ethical and Sharia Funds

Workers less likely to feel discriminated against


Break


Nigel PettingerDirector of customer services

Five practical steps to get started with NEST

#nestontheroad


Employer journeyFirst, employers need to understand what they need to do to meet their duties. TPR’s guidance will help them do this. You can find this at tpr.gov.uk

Then get ready to use NEST. Follow our five practical steps to get started.


Step 1: Get your plans in place

Decide the implementation approach

Decide how to set up and run the scheme

Determine what needs to change in the business processes

Agree who’ll run the scheme

Plan communication strategy

Agree a detailed project plan – use of waiting periods?


Step 2: Get your organisation ready

Set up online– Registration– Employer information– Set up delegates– Set up groups and contribution levels– Payment details

Make changes to the business Test new processes Develop and deliver communications– Keeping workers informed– Statutory communications– Scheme communications


Step 3: Assess and notify your workers Gather workforce data – pay reference periods, amounts paid, not earned Perform the assessment – and plan re-assessments Confirm enrolment approach with workforce Deliver statutory communications


Matthew Blakstad Head of member and market communications

Matthew BlakstadHead of member and market communications

NEST’s approach to communication

#nestontheroad


Clear communication

Ease

Empowerment

Transparency


NEST phrasebook

Words and phrases that NEST is usingWords and phrases to be avoidedDefinitionsNew words


NEST phrasebook: what we found

Terms that can be used

without further

definition

Example:cash lump

sum

Terms that require adefinition

Example:contributio

n limit

Terms that need an

alternative

Example:annuity

Terms that should be avoided

Example:defined

contribution


Workplace communication

Business communicatio

ns

NEST employer notices

NEST templates

Managing internal and external stakeholder media

Managing the change

Getting your workers ready

Meeting statutory

requirements


Pre-enrolment/ ongoing

employer communication:NEST templates

Stage 2

Cascade of information:

execs to managers

Stage 1

Ongoing membership

website, annual statement and other channels

Stage 4

Enrolment:NEST provides

welcome pack and website access

Stage 3

Example communication strategy

Employer branded/co-branded NEST branded

Duty date- Y months

Duty date and beyond

Duty dateDuty date- X months


Communications – who gets what?


Employer notices – what the worker will see


Communicating with workers


Step 4: Enrol your workers Automatically enrol eligible job-holders Identify workers who have opted in Download and populate templates or create files Upload member enrolment data– name, address, date of birth, gender– NI number, email address– confirm they have been told about enrolment– enrolment type, group, payment source, enrolment date

Make necessary changes to member records in HR / payroll


NEST in actionMatthew BlakstadHead of member and market communications

#nestontheroad


Step 5: Manage contributions and opt-outs Calculate and make deductions from payroll Download and populate templates or create files Submit a contribution schedule– surname, NI number– pensionable earnings, employer and member contribution– use to notify paper opt-out or change of group

Make payment, based on schedule Manage opt-outs Manage cessations and leavers Make changes to contribution schedules


Three ways to opt out

TelephonePost

Online


Roy PorterAssistant director, distribution

Next steps

#nestontheroad


Questions and answers


Contact NEST - employers

If you’re an employer:

Email us at [email protected]

Call us on 0300 303 1949

If you’re an adviser:

Email us at [email protected]

Call us on 0300 303 1949

#nestontheroad


Legal information

© NEST Corporation 2012. All rights reserved. This information doesn’t constitute financial, investment or professional advice and shouldn’t be relied on.

We don’t make any personal recommendation or give advice to employers and their workers on how to make investment decisions. If you’re considering using NEST you might want to talk with an appropriately qualified financial adviser.

We don’t give any undertaking or make any representation or warranty that this document is complete or error free. We don’t accept responsibility for any loss caused as a result of any error, inaccuracy or incompleteness.

Any form of reproduction of all or any part of these slides is not allowed.

© NEST Corporation 2012. All rights reserved. Welcome NEST roadshow.

Documents

Transcript of © NEST Corporation 2012. All rights reserved. Welcome NEST roadshow.