1. Workplace Pension Reform AAT Birmingham Branch Meeting David Lunt Head of Relationship Management 14 th September 2011

2. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. A new market of people new to saving There are around 19.7 million people employed in the private sector with 14-15 million eligible for automatic enrolment 9-10 million without a qualifying pension scheme 8 million people within NEST’s intended target market

3. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. 2012 reforms: what’s changing? Saving is a ‘minority sport’ Employers choose whether to contribute Active choice often needed from worker Behavioural barriers to take up Uneconomic for existing providers to supply lower earners Saving is the norm NEST is designed for our target market Automatic enrolment Do nothing = save in a pension Employers have to offer a contribution to certain jobholders Now2012 - 2016

4. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Impact on employers (Pensions Act 2008 and 2010 Review) Minimum Employer Contributions - Employers have to pay in at least part of a minimum contribution with individuals and HMRC contributing the rest 3% of “band earnings” minimum employer contribution + tax relief + jobholder contribution = total 8 per cent minimum contribution Total minimum contribution payable from October 2017 Contributions based on earnings band £5,715 and £38,185 in 2010 terms

5. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Minimum contribution levels The total minimum contribution to a worker’s retirement pot will be 8 per cent of their qualifying earnings Of this 8 per cent, the employer will have to contribute a minimum of 3 per cent The rest will be made up of tax relief and the worker’s contribution

6. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. DWP’s staging and phasing plans Oct 2012 Apr 2014 Aug 2014 Mar 2016 Oct 2016 Oct 2017 1 per cent worker contribution 3 per cent worker Steady state 5 per cent worker Large employers Medium employers Small/micro employers New born PAYEs 1 per cent employer contribution 2 per cent employer Steady state 3 per cent employer Staging Phasing

7. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Certification Percentage and type of payEmployer contribution 9 per cent of basic payat least 4 per cent 8 per cent of pensionable pay, provided pensionable pay is at least 85 per cent of total pay at least 3 per cent 7 per cent of total payat least 3 per cent The Government plans to consult on proposed certification options :

8. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Who does what? Scope of automatic enrolment Staging and phasing timetable Compliance with employer duties Regulator of workplace pension schemes, including NEST A new, trust-based pension scheme Public service obligation to accept all employers who want to use NEST to meet their employers duties

9. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Understanding our target market We are committed to designing our activities around the needs of all of our future employers and members Conducting surveys External research Research panels

10. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. How NEST can be used offered to all workers Sole scheme to sit alongside existing scheme already in place for a different group of workers For a particular group of workers where the existing scheme has a waiting period Entry level scheme Where minimum contributions are made for all workers, using another scheme to ‘top up’ contributions Base scheme

11. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Designed for the target market Clear communication Online Travels with the member Tailored investment approach Help with retirement income Low charges Always focused on our members

12. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Key products: Members

13. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Investment - key issues Member focused Diversity Dynamic management Choice Responsible investment

14. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Proposition to meet all our members’ needs NEST Pre-retirement Fund NEST Lower Growth Fund NEST Sharia Fund NEST Sharia Fund NEST Ethical Fund NEST Higher Risk Fund

15. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. NEST Retirement Date Funds – funds for everyone A new approach Age-based investment funds to meet members’ needs Your NEST 2058 FundYour NEST 2039 FundYour NEST 2022 Fund

16. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Three phases of lifecycle Age MaximumMinimum Risk profile Reference glide path

17. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. NEST fund structure Return Seeking Composite Fund Income Seeking Composite Fund Your NEST 2058 Fund Your NEST 2039 Fund Your NEST 2020 Fund Annuity Matching Composite Fund Passive Global Equity Diversified Beta Passive Gilts Passive Index Linked Gilts Liquidity

18. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Lifecycle of 2058 Retirement Fund 22 27 32 37 42 47 52 57 62 Risk profile Age Return Seeking Composite Fund Income Seeking Composite Fund Annuity Matching Composite Fund 2058

19. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Lifecycle of 2039 Retirement Fund 40 44 48 52 56 60 64 67 Risk profile Return Seeking Composite Fund Income Seeking Composite Fund Annuity Matching Composite Fund Age 2039

20. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Lifecycle of 2022 Retirement Fund 55 57 60 63 65 Risk profile Return Seeking Composite Fund Income Seeking Composite Fund Annuity Matching Composite Fund Age 2022

21. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Getting your money out of NEST NEST scheme and online information Retirement income (Choose from NEST panel) Shopping around for a retirement income Using the Retirement Tool Taking your pot as cash Transfer out at retirement

22. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. NEST Corporation Chair - Lawrence Churchill Trustee Members Tom Boardman Sue Slipman Paul Hewitt Chris Hitchen Julius Pursaill Laurie Edmans Nigel Stanley Araj Amiri Sharon Darcy

23. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Business model NEST Corporation Employers and members Scheme administrator (TCS) Fund administrator (State Street Corporation) Fund managers (UBS, BlackRock, State Street Corporation, HSBC, F&C) Retirement income providers

24. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. NEST’s features: employers Designed to minimise your burden: –online –clear communications –no continuing administration when members leave your employment Designed for your workers: –an investment approach designed for members –low charges –help when buying a retirement income

25. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. Contact us 0300 3031949 www.nestpensions.org.uk

26. © NEST Corporation 2011. We are entitled to bring any legal action necessary to protect our intellectual property rights. These slides do not constitute financial or other professional advice. You must not, or allow another party to, alter these slides in any way. Copying or distributing this material is allowed only with the permission of NEST Corporation. www.nestpensions.org.uk