Should Nest have been put on probation before the restrictions were lifted?

Nest, the pension scheme that will soon be one the UK’s most important with a huge proportion of the workforce signed up to its own particular investment approach has uncovered a rather unfortunate fraud issue with one of its suppliers.

The chief Tim Jones is to forgo his bonus as a result, as Professional Pensions reports today which seems fair enough. But surely, the wider question is whether the lifting of the Nest restrictions should have been announced – admittedly in 2017 – before the wider world knew of the problems there.

There is rather a lot of ideology involved in the decision as well as many practicalities. The ideological side of the equation involves a deep seated suspicion of the private pension industry which pervades all parties and their policies though more so those to the left of the political spectrum. The practical issue is that the contribution limit would have restricted Nest in its appeal though it might helped concentrate  minds within the organisation on focusing on schemes and members that other pension firms didn’t really want – actually quite a noble calling. However, the government clearly wants Nest to make money and not require any further subsidies.

But surely Nest should have been put on probation first. It is unfortunate that this news comes to light not long after that decision had been made.