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Aegon teams up with Nest to run dual schemes

by William Robins on Mar 15, 2012 at 10:34

Life company Aegon has agreed at deal with National Employment Savings Trust (Nest) to allow employers to run pension schemes from both providers side by side.

Aegon said it was the first provider to agree a formal ‘dual scheme’ approach with the Nest.

The deal means Nest and Aegon will work together in four ways:

Integrated re-enrolment, and centralised calculation and transmission of contribution information for all employees. Aegon will facilitate this process.
A common strategy for delivering communications.
Joint bids to corporate customers including joint tender material and customer-facing documents.
Regular review of agreed processes and joint activity to ensure the business relationship continues to develop to meet clients’ on-going needs.

Tim Jones (pictured), Nest chief executive, said: 'Nest has been built to work alongside existing provision and is specially designed for its target market of people new to pension saving and their employers. We are very pleased to be working with Aegon as one of our partner providers.’

The deal comes amid demands from MPs to remove a ban on transferring money in and out of Nest from other pension schemes. A Work and Pensions Select Committee report has urged the government to lift the transfer ban and a cap on contributions imposed on Nest following the making auto-enrolment work review in 2010.

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4 comments so far. Why not have your say?

This is a brilliant development and provides much relief to those of us who work in the corporate sector. Well done AEGON, now how about those terms?

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The last time I spoke to someone at AEGON about stakeholder, he readily admitted it was a terrible money-loser. So why are you bothering? I asked. To that, he didn't have an answer.

So how does AEGON plan to make any money out of being involved with NEST? Joint bids to corporate customers including joint tender material and customer-facing documents are all very well, but AEGON will have to cut its margins so close to the bone to be able to present itself as a credible alternative that it'll surely end up writing schemes as profitless as stakeholder.

It doesn't sound like a very good business strategy. In AEGON's shoes, I'd be producing material to help IFA's make a convincing pitch against NEST rather than doing joint presentations alongside people paid to promote NEST.

And what will AEGON be allowed to say in their presentations?

Hands up all those who've ever even heard of TATA.

Did you know they're an Indian company and that the administration of your fund will be dealt with by people sat in offices 5000 miles away? They're nice folks and all that, but do you really want your benefits administered in India?

Did you know that if TATA screw up there are no other contenders in the frame?

Did you know that your money will be managed by an American company even less well know to you and me than TATA?

Did you know the range of funds available are nearly all index-trackers, whilst the rest have no track record at all?

Still, let's see how it goes. As a government initiative, I'm sure it'll be a resounding success for all concerned.

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Not all members will be profitable. The main reason of having a private scheme against NEST will be to reduce the admin nightmare that this will cause businesses.

If you only pick off the profitbale members then the co. will still need procedures in place to deal with the unprofitable members that should be in NEST.

At this point they will put everyone in NEST to avoid the hassle of dealing with NEST and the private co.... End result is we nor the providers will get anything at all

I'd rather have them work with NEST than not and let NEST take £20pm contributions

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robert c

Mar 16, 2012 at 08:19

Is there really any substance to this tie up - Aegon have not gone with Tata to do their auto-enrolment hub - so it looks the same as every other providers offer - use a third party auto-enrolment system to syphon off some the employees into nest and some into Aegon. Re the comms - I would imagine this just ends up with Aegon doing all the other stuff - could be wrong but it does look like the same agreement that everybody else has with Nest - just that Aegon are selling it harder.

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