Employers can contribute through debit cards: NEST

NEST will Allow Employers to Contribute Through Debit Cards and Direct Credit

NEST will Allow Employers to Contribute Through Debit Cards and Direct Credit

Employers can make contributions to the National Employment Savings Trust (NEST) using debit cards, a facility denied by most service providers.

The new online system of NEST allows employers to contribute either through direct credit or debit cards, although the employer expects majority to contribute through cards.

Although there’s no additional cost for contributions, NEST reserves the right to charge for contributions made through debit cards and direct credits if transaction costs become expensive in future – an unlikely scenario.

Standard Life is the only provider that allows debit card contributions for its stakeholder schemes now.

Direct debits will incur no cost and NEST has no authority to levy charge for it. However, if terms and conditions are broken, NEST will initiate discussions with employers first and fees levied will cover the actual cost incurred since NEST is a not-for-profit organisation.

“We did not introduce that across our subsequent corporate pension arrangements because there is very little demand for it,” said Jamie Jenkins of Standard Life, referring to the debit card contributions facility.

“We have not seen any demand for it. However, it is very much in mind as part of our 2012 development schedule,” said Dave Lowe, pension management director at Zurich.

Provider Friends Life does not accept contributions by debit cards but plans are afoot to introduce direct debit facility for all members not covered by scheme contributions paid by employers.

Employers can customise access of third parties, such as IFAS and employee benefit consultants, in NEST’s online system. The frequency of contributions can also be decided by firms.

“As well as providing flexibility around payment methods, we’re building-in increased flexibility around the due date of contributions and their frequency in order to align to more payroll cycles and improving our website’s provision for downloading data, following discussions with large employers,” said Graham Vidler, director of communications and development at NEST.

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