Annuity providers on NEST panel have been directed by the corporation not to discuss details about the scheme or the process of joining the panel.
Andrew Megson, managing director of retirement at Partnership refused to give details of joining the panel saying he’s not authorised.
Megson refused to discuss any detail about they became members on the panel but said the entire selection process was drawn out. “There was quite a detailed and in depth procurement process that was pretty labour intensive and pretty rigorous”, said Megson adding enormous documentation was involved in the process that covered “nearly everyone in the business”.
However, head of media and PR at the NEST, Heather Tilston said queries regarding the corporation should be directed to them.
“We have asked our providers to direct questions about NEST to us in the same way that I would direct questions about any company and/or product to the relevant organisation”, she said. When asked to reveal details on the procurement process, all she could say that providers should be able to accommodate pension pots as small as £1,500, be able to transfer data securely and be able to provide quotes online.
NEST had initially come out with advertisements seeking proposals from companies considering being on the panel. The corporation also refused to share details about the number of applications received and the number of applications rejected saying they will not be able to disclose details of a commercially competitive process.
“(We) would have been concerned and disappointed if the company had not been selected for the panel”, said Mr. Megson of Partnership while describing the procurement process the company went through.
Ms Tilston backed the selection of a retirement panel when asked if NEST’s panel of selected providers was contrary to the Open Market Option (OMO)policy of the government, saying it’s appropriate for the target market.
“Our members have the option to go to the OMO, What we are saying is we recognise our members, compared to other people at retirement, have pots that are likely to (be) small. Our providers guarantee to go down to pots of £1,500”, she said.
While welcoming the move, PICA said the OMO is still important. “This looks like a reasonable compromise between making sure there was a decent choice of provider and product while taking into account not all would want to meet NEST’s terms”, it said.
“Most importantly, no one with a NEST pension will be forced to use the panel. It is not a substitute for shopping around but a backstop”, said Tom McPhail, chairman of PICA.