The National Employment Savings Trust (NEST) will be given increased powers to decide which self-employed pension savers to admit into its pension scheme, the Department for Work and Pensions (DWP) confirmed yesterday.

The change has been outlined in the DWP’s consultation response which looks at amendments to the NEST Order in efforts to bring it in line with recent changes to auto-enrolment (AE) legislation.

The consultation, launched in October last year, looked at law exempting certain European employment from AE as a way to avoid overlaps between AE and pension rights for those subject to laws of another European country.

It previously highlighted shortcomings stating: “The exemption does not capture a person who is self-employed or a single person director. Neither does it prevent continuing contributions in respect of a qualifying person who has already become a member of NEST.”

But now, the DWP says its decision to hand over qualifying powers to NEST’s trustees will “enable NEST to remain a low-cost proposition for its target market of low to moderate earners”.

In addition, self-employed members will no longer be required to agree to the trust’s member terms and conditions, “as this works against the obligation in the NEST Order for the trustee to admit them.”

Other amendments include: plans to give employers the flexibility to terminate their schemes with NEST; clarification that third parities can make contributions to a member’s account; and providing clear definition around the minimum contributions of members in more than one job.

The consultation only received two responses from the National Association of Pension Funds and the Chartered Institute of Payroll Professionals. Both supported the proposals for amendments to the NEST Order, stating that the amendments were “sensible as it was essential for NEST to work efficiently and also important that NEST’s statutory framework fitted with changes made to automatic enrolment legislation since 2010”.

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