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13 Aug 2012

SMEs Signed Up For NEST Report Strong Take-up

Small and medium-sized companies that have signed up for NEST ahead of the start of automatic enrolment are seeing considerable interest in pension saving, the official magazine of the Chartered Institute of Personnel and Development, People Management, reported last week.

Auto-enrolment, which comes into effect for the biggest companies in the UK from October 2012, will not become a legal requirement for SMEs with a headcount of 250 or fewer until 2014. Estimates of the number of employees to remain in the pension and not opt out after the reforms are between 50% and 90%.

According to data from volunteer SMEs that have signed up for NEST ahead of the starting date, many are seeing take-up of 80% and above, a sign that interest in pensions in smaller businesses may be much stronger than expected.

Technology firm Fluidata, with staff of 47, had take-up of only 10% for its previous pension scheme. Some 90% of its employees are participating in pensions after the company signed up with NEST and adopted an auto-enrolment model in February.

Meanwhile, door and window company VBH, which has a workforce of 68, saw 78% of eligible employees join its pension scheme after the firm signed up for NEST, in spite of the fact that VBH has opted for the minimum contribution of 1%.

NEST has seen 100 or so smaller firms, including Fluidata and VBH, sign up under its "volunteer programme", helping to fine-tune its offering ahead of auto-enrolment. NEST also has 1,700 members so far from 60 larger companies with which it is already working.

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