NEST Pensions has appointed WTW and Hymans Robertson to assist with its innovative programme to develop a new retirement income offering for defined contribution (DC) retirees.
With more than 13 million members, one million employers and more than £40bn (€48bn) in assets under management, NEST said it performs an “essential” role in facilitating “high-quality DC auto-enrolment while delivering value for money”.
it added that as NEST’s membership matures, members will increasingly rely on income from their DC savings in retirement.
The pensions provider said it is also building on its products, services, guidance and tools to provide members with a lifelong, sustainable income, while retaining the benefits of flexibility introduced by pension freedoms.
Mark Rowlands, head of retirement at NEST, said: “NEST has been a founding member of the UK’s auto-enrolment pension market, bringing millions of people into pension saving, many for the first time.”
He anticipates that one in three workers is expected to have a NEST pension pot by the late 2020s. “We want to ensure their journey to retirement is as seamless as their savings journey with NEST,” he added.
“We know our members want a decumulation product which provides some flexibility in the early years of retirement”
Mark Rowlands, head of retirement at NEST
“We know our members want a decumulation product which provides some flexibility in the early years of retirement, but also provides sustainable lifelong income as a wage replacement, so that it’s in place by the time our members need it,” Rowlands continued.
He said that both WTW and Hymans Robertson’s experience in these areas and their expertise in retirement offering design, modelling, investment and insurance solutions, member support and engagement, meant the two firms are well placed to help NEST develop solutions that will help its members make the most of their savings throughout their retired lives.
Simon Eagle, senior actuary at WTW, added: “Working with the UK’s largest DC pension scheme to deliver innovative new solutions for members is a real privilege. We are delighted to be assisting NEST so broadly to advance their retirement proposition and support the development of a member engagement approach in the lead-up to, and in, retirement.”
Paul Waters, head of DC markets at Hymans Robertson, pointed out that DC savers are facing a “profound retirement adequacy challenge” along with complex decisions at retirement and innovative retirement solutions can play a large role in addressing these challenges and delivering better member outcomes.
He said: “NEST’s groundbreaking work here is leading the way and we know from experience, where NEST innovate and lead others then follow, enabling wider industry change.”