Nest restrictions that cap pension contributions and restrict transfers from the scheme should be scrapped, according to 32 per cent of large employers that took part in a JLT Employee Benefits (JLT) survey.

A total of 212 companies responded to the JLT 250 Club survey, published following the Department for Work and Pensions’ consultation deadline yesterday on these restrictions.

It found that only 11 per cent of responding companies wanted to keep all Nest restrictions on annual contributions and transfers, compared to the 32 per cent that want them removed. In addition, 47 per cent have selected the pension scheme(s) they will use for auto-enrolment, of which only 37 per cent considered Nest and 47 per cent decided not to use Nest.

JLT Employee Benefits director Charles Cowling at said: “In our view, the ‘Nest restrictions’ now do very little other than adding complexity to workplace pension reforms, which are fundamental in getting people to save more for their retirement. Most employers, who have considered the issue, agree and would prefer both the annual contribution limit and the restrictions on transfers to be removed from the Nest constitution.

“The findings from our research amongst larger employers, all with auto-enrolment staging dates before the end of 2013, echo our own experiences and demonstrate that there is a preference for ‘keeping pensions simple’.

“We envisage that the charges offered by pension providers to smaller employers will be higher than those secured by early stagers, therefore the removal of Nest restrictions will make it simpler for smaller employers to compare different schemes and identify a good quality, low cost option for their workforce.”

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