· News

NEST outlines guidance for employers should staff opt out of pensions auto-enrolment

The National Employment Savings Trust (NEST) has detailed its stance on how employers should manage staff that wish to opt out of pensions auto-enrolment.

A statement from NEST said managing opt outs is one area that is potentially complex and is crying out for innovative, customer-centric solutions.

It said: "As a new provider established specifically for automatic enrolment, we are used to bringing innovation to everything we do. Our approach to investment, our primarily online approach and how we communicate with members and employers are just three examples of that.

"NEST is a scheme that has ease of use in its DNA, so we're making every effort to ensure that opt out is straightforward. NEST has taken a research-based approach to developing how our opt out process works, which has been carefully tested with potential members and employers.

"For members, we believe that means enabling them to make an informed decision. Our research told us that members want to feel in control, and to have enough information to be able to make an informed decision. They also didn't want the process to be too onerous if they did decide to opt out."

NEST's employer research found businesses are concerned about dealing with a large volume of opt outs and of being in a position where they might be perceived to be incentivising staff to opt out - known as 'inducement.'

If a worker opts out online or via our telephone service, the employer will normally receive notification from NEST the next working day. This is via secure electronic message.

If a member uses a printed form, they will need to give this to their employer.

The statement said: "We believe the processes we've developed strike a good balance between ensuring members have the information they need to make an informed decision, including the information they are legally required to have, and making sure the process is simple to use. We also think employers will benefit from the steps we've taken to reduce the administration associated with this part of the automatic enrolment process.

"As automatic enrolment rolls out we will continue to monitor our approach, and take on board employer and member feedback, to ensure we meet their requirements."

Find out more about NEST