The UK’s soon to be largest Pension Fund, NEST, at the Brasil Investment Summit

2012 reforms of pension regulations in the UK will require very employer in the UK to provide a qualifying pension for every worker, part-time or full-time. One in every four workers in the UK, 8-10 million people, does not currently have access to a pension scheme. Many have never had access to a pension scheme. NEST is a company working in this void.

Rudyard Ekindi of NEST Pension Schemes laid out his firm’s investment beliefs: 1) Understanding scheme members is essential; 2) Incorporating environmental, social and governance factors is in the interests of members; 3) Taking investment risk is usually rewarded in the long term; 4) Diversification is the key tool for managing risk and return; 5) Analysis of economic and market conditions drives strategic decisions (he does not blindly invest in asset classes, but looks at where they´re at in their cycles); 6) Risk-derived asset allocation drives long-term performance; 7) Passive management generally delivers better value than active management.

90 percent of Nest’s membership is in its default strategy. The fund has the savings phases, foundation (ages 22-30), growth (ages 30-51) and consolidation (ages 51 and beyond). The last five to ten years of the pension pot are used to buy annuity tracking assets.

By Michael Pieper, Brasil Investment Summit