1. © NEST Corporation 2012. All rights reserved. Welcome NEST roadshow

2. © NEST Corporation 2012. All rights reserved. Introduction Roy Porter Assistant director, distribution #nestontheroad

3. © NEST Corporation 2012. All rights reserved. Agenda NEST- we’re ready Roy Porter Getting ready for automatic enrolment Nigel Pettinger Choosing a suitable investment approach for automatic enrolment Mark Fawcett Break Five practical steps to get started with NEST Nigel Pettinger NEST’s approach to communication Matthew Blakstad A recap of what employers need to do Roy Porter Q and A session

4. © NEST Corporation 2012. All rights reserved. How NEST can be used Offered to all workers Sole scheme For a particular group of workers To sit alongside existing scheme already in place for a different group of workers Where the existing scheme has a waiting period As an entry level scheme As a base scheme Where minimum contributions are made for all workers, using another scheme to ‘top up’ contributions Letting employers keep their existing voluntary scheme(s) while being sure they’ve got their duties covered As an automatic enrolment scheme

5. © NEST Corporation 2012. All rights reserved. What NEST offers We’ve got it covered We’re designed for automatic enrolment NEST retirement date funds that are right for most workers Sharia fund, ethical fund, and different risk options at the same low charge Straightforward approach for members Sophisticated risk management, investment and governance designed for good member outcomes International expertise throughout the supply chain Pots that travel with the member when they leave Clear communications Comprehensive support through our website and UK-based contact centre

6. © NEST Corporation 2012. All rights reserved. What NEST offers We lighten the load Plain language NEST-ready templates for communications to workers NEST-designed decision trees, tools and explanatory guides Preset contribution levels and enrolment types to make compliance simpler Electronic opt-out by web or telephone that reduces costly paper processes All NEST administration tasks can be delegated to third party or internal specialists

7. © NEST Corporation 2012. All rights reserved. Looking at the numbers

8. © NEST Corporation 2012. All rights reserved. The staging process. How big and how many? Over 120,000 employers with <30 workers 17 employers with >120,000 workers Over 12,000 employers with >90 workers

9. © NEST Corporation 2012. All rights reserved. PAYE schemes – Oct 2012 to Feb 2014 These figures are from the Pensions Regulator and reflect the number of PAYE schemes not the number of employers. Employers may have more than one PAYE scheme.

10. © NEST Corporation 2012. All rights reserved. PAYE schemes – Oct 2012 to May 2015 These figures are from the Pensions Regulator and reflect the number of PAYE schemes not the number of employers. Employers may have more than one PAYE scheme.

11. © NEST Corporation 2012. All rights reserved. Preparing to join We have been thinking about the path an employer has to take before joining a scheme such as NEST. Ready to join Employer with no knowledge of duties Understanding duties Knowing how it will comply Prepares processes

12. © NEST Corporation 2012. All rights reserved. Nigel Pettinger Director of customer services Getting ready for automatic enrolment #nestontheroad

13. © NEST Corporation 2012. All rights reserved. Employer journey First, employers need to understand what they need to do to meet their duties. TPR’s guidance will help them do this. You can find this at tpr.gov.uk Then get ready to use NEST. Follow our five practical steps to get started.

14. © NEST Corporation 2012. All rights reserved. DWP’s staging and phasing plans Oct 2012 Feb 2014 Apr 2014 Apr 2015 Jan 2016 Employers with 250 or more staff Employers with 50 to 249 staff Employers with 30-49 staff Employers with fewer than 30 staff Aug 2015 Oct 2015 April 2017 Staging 1 per cent employer contributions 2 per cent employer contribution 3 per cent employer contribution Oct 2017 Oct 2018 Phasing

15. © NEST Corporation 2012. All rights reserved. Employer duties - who qualifies for what?

16. © NEST Corporation 2012. All rights reserved. Employer journey

17. © NEST Corporation 2012. All rights reserved. Understanding what employers need to do Know the timelines – staging dates Understand the regulations – TPR guidance Get to grips with their legal duties Set up their project team – including payroll Assess their workforce structure Review their current HR/payroll processes

18. © NEST Corporation 2012. All rights reserved. How to assess the investment approaches of schemes Mark Fawcett Chief Investment Officer #nestontheroad

19. © NEST Corporation 2012. All rights reserved. Does the default approach have a high level objective? Guidance checklist Does the investment strategy and asset allocation take account the needs of members? Are members protected from the risks associated with investment? Are members locked into the default or are there other options? Does the default approach have a high level objective? Does the investment strategy and asset allocation take account of the needs of members? Is the default approach in line with guidance? Are the charges appropriate and are they clear to members? Are members protected from the risks associated with investment? Are members locked into the default or are there other options? Are the charges appropriate and are they clear to members?

20. © NEST Corporation 2012. All rights reserved. NEST Retirement Date Funds – unique single year target date funds NEST 2058 Retirement Fund NEST 2039 Retirement Fund NEST 2022 Retirement Fund UBS Global equity Growth seeking assets Income seeking assets BlackRock Diversified beta BlackRock Sterling cash SSga Gilts SSga Index- linked gilts RLAM UK corporate bonds Other asset classes

21. © NEST Corporation 2012. All rights reserved. Growth phase Approx 30 years Target CPI +3 per cent (after charges) Maximise performance Sensitive to extreme shocks Risk appetite and risk capacity – medium Risk need – high Foundation phase Approx 5 years Outperform inflation (after charges) Reduce impact of extreme shocks Foundation phase Approx 5 years Outperform inflation (after charges) Reduce impact of extreme shocks Growth phase Approx 30 years Target CPI +3 per cent (after charges) Maximise performance Sensitive to extreme shocks Risk appetite and risk capacity – medium Risk need – high NEST Retirement Date Funds - objectives Target investment returns well in excess of inflation after all charges over the long term Track annuity prices Minimise chance of losses late in the journey Consolidation phase Approx 10 years Equity Property Corporate Bonds Other Fixed Income Assets Cash

22. © NEST Corporation 2012. All rights reserved. NEST Pre- Retirement Fund NEST Lower Growth Fund NEST Higher Risk Fund Diversified Lifestyled Low cost NEST Retirement Funds – appropriate choice NEST Sharia Fund Low cost NEST Ethical Fund Diversified Dynamic Lifecycled

23. © NEST Corporation 2012. All rights reserved. Investment advisers BlackRock Sterling cash SSga Gilts SSga Index- linked gilts UBS Global diversified equity BlackRock Diversified beta RLAM UK corporate bonds NEST Investment Committee Fund administrator – State Street Corporation NEST 2058 Retirement Fund NEST 2039 Retirement Fund NEST 2022 Retirement Fund MSCI Barra Risklab Co-operative Asset Management Strong governance and world class partners NEST’s in-house Investment Team

24. © NEST Corporation 2012. All rights reserved. What members see... Straightforward enrolment experience NEST Retirement Date Funds Focussed NEST Fund Choices Clear communications without overwhelming Same low charge across all funds Multi phase investment, targeting different risk and return objectives Dynamic and sophisticated risk management - designed to succeed in all economic conditions High levels of governance and clear alignment of interests And under the bonnet...

25. © NEST Corporation 2012. All rights reserved....So, what does all this mean for member outcomes – a stochastic model view

26. © NEST Corporation 2012. All rights reserved. Performance to date Stayed well within our risk budget – if at the lower end Reduced the volatility and some of the significant down sides Are on track to meeting our longer term return objectives NEST 2055 Retirement Fund NEST 2021 Retirement Fund NEST 2040 Retirement Fund UK CPI Global Developed Market Equity* *FTSE All World Developed Total Return index

27. © NEST Corporation 2012. All rights reserved. How NEST’s Retirement Funds help employers and workers Feels personal and tailored regardless of age Aiming for consistent outcomes over time Sophisticated risk management approach Clearly labelled funds and investment communications Workers less likely to approach their employer for guidance Feels fair, so workers less likely to complain or be disillusioned Fewer concerns from workers, particularly in times of economic stress Workers reassured and empowered to find out more if they want to – employers spend less time on queries NEST Ethical and Sharia Funds Workers less likely to feel discriminated against

28. © NEST Corporation 2012. All rights reserved. Break

29. © NEST Corporation 2012. All rights reserved. Nigel Pettinger Director of customer services Five practical steps to get started with NEST #nestontheroad

30. © NEST Corporation 2012. All rights reserved. Employer journey First, employers need to understand what they need to do to meet their duties. TPR’s guidance will help them do this. You can find this at tpr.gov.uk Then get ready to use NEST. Follow our five practical steps to get started.

31. © NEST Corporation 2012. All rights reserved. Step 1: Get your plans in place Decide the implementation approach Decide how to set up and run the scheme Determine what needs to change in the business processes Agree who’ll run the scheme Plan communication strategy Agree a detailed project plan – use of waiting periods?

32. © NEST Corporation 2012. All rights reserved. Step 2: Get your organisation ready Set up online – Registration – Employer information – Set up delegates – Set up groups and contribution levels – Payment details Make changes to the business Test new processes Develop and deliver communications – Keeping workers informed – Statutory communications – Scheme communications

33. © NEST Corporation 2012. All rights reserved. Step 3: Assess and notify your workers Gather workforce data – pay reference periods, amounts paid, not earned Perform the assessment – and plan re-assessments Confirm enrolment approach with workforce Deliver statutory communications

34. © NEST Corporation 2012. All rights reserved. Matthew Blakstad Head of member and market communications NEST’s approach to communication #nestontheroad

35. © NEST Corporation 2012. All rights reserved. Clear communication Ease Empowerment Transparency

36. © NEST Corporation 2012. All rights reserved. NEST phrasebook Words and phrases that NEST is using Words and phrases to be avoided Definitions New words

37. © NEST Corporation 2012. All rights reserved. NEST phrasebook: what we found Terms that can be used without further definition Example: cash lump sum Terms that require a definition Example: contribution limit Terms that need an alternative Example: annuity Terms that should be avoided Example: defined contribution

38. © NEST Corporation 2012. All rights reserved. Workplace communication Business communications NEST employer notices NEST templates Managing internal and external stakeholder media Managing the change Getting your workers ready Meeting statutory requirements

39. © NEST Corporation 2012. All rights reserved. Pre-enrolment/ ongoing employer communication: NEST templates Stage 2 Cascade of information: execs to managers Stage 1 Ongoing membership website, annual statement and other channels Stage 4 Enrolment: NEST provides welcome pack and website access Stage 3 Example communication strategy Employer branded/co-brandedNEST branded Duty date - Y months Duty date and beyond Duty date - X months

40. © NEST Corporation 2012. All rights reserved. Communications – who gets what?

41. © NEST Corporation 2012. All rights reserved. Employer notices – what the worker will see

42. © NEST Corporation 2012. All rights reserved. Communicating with workers

43. © NEST Corporation 2012. All rights reserved. Step 4: Enrol your workers Automatically enrol eligible job-holders Identify workers who have opted in Download and populate templates or create files Upload member enrolment data – name, address, date of birth, gender – NI number, email address – confirm they have been told about enrolment – enrolment type, group, payment source, enrolment date Make necessary changes to member records in HR / payroll

44. © NEST Corporation 2012. All rights reserved. NEST in action Matthew Blakstad Head of member and market communications #nestontheroad

45. © NEST Corporation 2012. All rights reserved. Step 5: Manage contributions and opt-outs Calculate and make deductions from payroll Download and populate templates or create files Submit a contribution schedule – surname, NI number – pensionable earnings, employer and member contribution – use to notify paper opt-out or change of group Make payment, based on schedule Manage opt-outs Manage cessations and leavers Make changes to contribution schedules

46. © NEST Corporation 2012. All rights reserved. Three ways to opt out Telephone Post Online

47. © NEST Corporation 2012. All rights reserved. Roy Porter Assistant director, distribution Next steps #nestontheroad

48. © NEST Corporation 2012. All rights reserved. Questions and answers

49. © NEST Corporation 2012. All rights reserved. Contact NEST - employers If you’re an employer: Email us at employer.enquiries@nestcorporation.org.uk Call us on 0300 303 1949 If you’re an adviser: Email us at intermediary.enquiries@nestcorporation.org.uk Call us on 0300 303 1949 #nestontheroad

50. © NEST Corporation 2012. All rights reserved. Legal information © NEST Corporation 2012. All rights reserved. This information doesn’t constitute financial, investment or professional advice and shouldn’t be relied on. We don’t make any personal recommendation or give advice to employers and their workers on how to make investment decisions. If you’re considering using NEST you might want to talk with an appropriately qualified financial adviser. We don’t give any undertaking or make any representation or warranty that this document is complete or error free. We don’t accept responsibility for any loss caused as a result of any error, inaccuracy or incompleteness. Any form of reproduction of all or any part of these slides is not allowed.