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Quick facts - our master trust assurance report

We’ve published our annual independent master trust assurance report (AAF 02/07). This means that Nest Corporation’s key internal procedures and controls for governance and administration of the Nest scheme have been independently assessed by our reporting accountant, KPMG LLP, for the most recent financial year.

Our report confirms that between 1 April 2019 and 31 March 2020 Nest Corporation’s procedures and controls were designed to meet and operated in line with the quality features set by The Pensions Regulator (TPR) and other relevant bodies.

What is a master trust assurance report?

Nest is a trust-based workplace pension scheme run by a Trustee. It is known as a master trust because it is a pension scheme used by two or more employers to provide defined contribution (DC) benefits on retirement. This is where retirement savings are based on a member’s contributions into the scheme and the returns, after charges, on the investment of the member’s money.

Following the Pension Schemes Act 2017, TPR required each master trust to apply for authorisation to continue operating. Nest Corporation became an authorised master trust in September 2019. 

TPR expects authorised master trust pension schemes like Nest to produce independently assessed reports on the operation of the processes and procedures the Trustee has in place to ensure the scheme’s good governance and administration.

TPR’s quality features for DC schemes are set out in its Code of practice no.13. In addition to this, the AAF 02/07 framework developed by TPR and the Institute of Chartered Accountants in England and Wales (ICAEW) sets out 27 objectives relating to good governance and administration of a scheme. The master trust assurance report allows trustees to show that they’ve been independently assessed on how they meet these benchmarks and objectives.

How does Nest achieve this assurance?

To achieve the assurances for our report, Nest Corporation has set up systems to document and maintain records of our processes and procedures for meeting the benchmarks and objectives for master trusts. Our systems also document and maintain records of what we do to manage any associated risks.

We provided evidence of these controls being operated over the financial year running from 1 April 2019 to 31 March 2020 to our reporting accountant, KPMG. Each of our internal controls was then independently assessed by KPMG.

KPMG’s auditors inspected and reported on the evidence of our controls and confirmed that our controls meet the quality standards set by TPR. In addition, the auditors confirmed that the procedures and controls in place for the governance and administration of the Nest scheme operated effectively over the 2019/20 financial year.

What’s in our assurance report?

Our master trust assurance report provides a summary of the procedures and controls we have in place to ensure that we deliver high-quality services to members and employers alike. It outlines the controls we had in place on 31 March 2020, focusing on:

  • The structure of our governance and reporting mechanisms - how we make sure that we’re doing the right things for our members, at the right time
  • The stability of our operations - how we manage growth in the number of members and employers we serve without impacting the quality of the services we deliver to them 
  • Our relationship with partners and providers - how our outsourced business model enables us to manage risks and provide excellent levels of service at a fixed price for our members. It also shows how we obtain adequate assurance on the key controls in the areas identified in the AAF 02/07 framework that we’ve outsourced.

What does this assurance mean for members or employers using Nest?

Our assurance report confirms that during the 2019/20 financial year, our internal procedures and controls were designed appropriately to meet, and operated effectively in line with, the quality standards for master trust pension schemes.

The report is just one of the ways that Nest has been independently assessed as being a high-quality scheme in the auto enrolment pensions market. Others include:

  • Defaqto 5-star rating

Every year from 2017 through to 2020, Nest has been awarded a 5-star rating in the workplace pension category from leading independent financial research company Defaqto. This indicates that Nest provides one of the highest quality offerings in the auto enrolment market.

  • Award-winning scheme

We've won many awards for our market-leading approach to investment strategy, pension design, communications and innovative web services for employers and payroll providers. This past year, we’ve been named the Best Investment Strategy Award Winner at the Pensions Age Awards (2020), Ultimate Default Fund Winner at the Corporate Adviser Awards (2019), Target Date Fund Manager of the Year at the Professional Pensions Investment Awards (2019) and DC Innovation Award from CIO Magazine (2019).

See an extract of our independent assurance report (PDF)

If you would like to discuss any aspects of the report with someone at Nest, please contact media@nestcorporation.org.uk

 

Last updated: 07/20