1. Automatic enrolment and NEST Richard Bartlett – Assistant Director of Distribution Wendy Beaver – Head of Scheme Development 10 November 2011

2. 2012 reforms: what’s changing? Saving is a ‘minority sport’ Employers choose whether to contribute Active choice often needed from worker Behavioural barriers to take up Uneconomic for existing providers to supply lower earners Saving is the norm NEST is designed for our target market Automatic enrolment Do nothing = save in a pension Employers have to offer a contribution to certain jobholders Now 2012 - 2016

4. DWP’s staging and phasing plans Oct 2012 Apr 2014 Aug 2014 Mar 2016 Oct 2016 Oct 2017 1 per cent worker contribution 3 per cent worker Steady state 5 per cent worker Large employers Medium employers Small/micro employers New born PAYEs 1 per cent employer contribution 2 per cent employer Steady state 3 per cent employer Staging Phasing

7. Operating the earnings and contributions thresholds with NEST £7,475 £5,035 or less No automatic enrolment. No right to employer contribution £5,035 £5,035 £7,475 or more Automatically enrolled with employer contribution £5,036 - £7,475 No automatic enrolment. But right to opt in with employer contribution

8. Certification The Government has recently been consulting on proposed certification options : * pensionable earnings must be equal to or more than basic pay Percentage and type of pay Employer contribution 9 per cent of pensionable earnings* at least 4 per cent 8 per cent of pensionable earnings*, but the pensionable earnings of all relevant jobholders must constitute at least 85 per cent of the earnings of those jobholders at least 3 per cent 7 per cent of total pay at least 3 per cent

13. What can NEST offer?

14. The scheme proposition: complementing existing provision Focused on its target market… Designed to be easy to use Clear communication Tailored investment approach Contribution limit Restrictions on transfers Help with retirement income … with many attractive features… Open to any employer Travels with the member Low charge Online A trust based scheme run in members’ interest No burden for employers … that will work in a variety of contexts Sole scheme For a particular group of workers Entry-level scheme Base scheme

17. Proposition to meet all our members’ needs NEST Pre-retirement Fund NEST Lower Growth Fund NEST Sharia Fund NEST Ethical Fund NEST Higher Risk Fund

19. Additional fund choices to meet diverse needs NEST Pre-retirement Fund NEST Lower Growth Fund NEST Sharia Fund NEST Ethical Fund For members who seek higher returns and are prepared to take more risk Invested in return seeking assets – for example, global equities and diversified beta For members who want to take as little investment risk as possible Invested 100 per cent in a liquidity fund For members who join NEST late in their careers but still manage to build a large enough pot to buy a retirement income Invested 75 per cent annuity matching and 25 per cent liquidity funds For members who want to invest in a portfolio that meets ethical criteria Invested in ethical equities, along with gilts For members who want to invest in compliance with Sharia principles Invested 100 per cent in Sharia Global Equity Fund NEST Higher Risk Fund

20. Charges - how will NEST compare?

21. Getting your money out of NEST NEST scheme and online information Retirement income (Choose from NEST Retirement Panel) Shopping around for a retirement income Using the Retirement Tool Transfer out at retirement Taking your pot as cash

23. Employers can send enrolment and payments data via file uploads

24. NEST will automatically increase minimum contributions in line with ‘phasing’

25. Different people (or your advisers) can manage different parts of the process

26. NEST Corporation Chair - Lawrence Churchill Trustee Members Tom Boardman Sue Slipman Paul Hewitt Chris Hitchen Julius Pursaill Laurie Edmans Nigel Stanley Iraj Amiri Sharon Darcy

27. Contact us www.nestcorporation.org.uk