NEST Corporation, the trustee body that runs the National Employment Savings Trust (NEST), has been defrauded out of more than £1.4m, its annual accounts show.
The body lost a total of £1,446,000 in 2012/13 as a result of the attack, which involved the diversion of a supplier payment. The fraud was directed at NEST Corporation so no money was taken from members’ retirement pots, reported sister publication Professional Pensions.
The National Audit Office has qualified the accounts due to the fraud.
It said efforts were on-going to recover the money with the collaboration of the Department for Work and Pensions (DWP), police and regulators. NEST said its fraud controls had since been tightened and business processes reviewed.
NEST Corporation chairman Lawrence Churchill said the fraud was a setback for the company.
He said: “This was a timely reminder of the need for continuous vigilance in the modern world.”
Chief executive Tim Jones added: “The fraud loss NEST Corporation incurred represented a serious failure in our system of internal controls. We have taken rigorous and immediate action to strengthen our control environment.”
Jones has waived his right to any bonuses for the 2012/13 financial year (PP Online, 17 July).
Elsewhere, NEST outlined the progress it had made since the beginning of auto-enrolment (AE).
By the end of June 2013 the scheme had 275,000 members and was working with over 900 employers -around half on its volunteer programme and half in the first stages of AE.
The scheme’s assets under management reached £11m. Majority of the scheme’s investments funds beat the benchmark performance, with the exception of the sharia fund.
Chairman Churchill said: “Our strategy for investing members’ contributions was also very successful this year, with all of the funds performing as expected and in some cases significantly exceeding the benchmarks. While it is longer term performance that matters, we have got off to a great start.”
Overall, Jones said he was proud of what the scheme had achieved in the last year.
He said: “We have faced significant challenges and hurdles but have delivered for members and employers.
“We won’t always get everything completely right, but we continue to learn and evolve our services to ensure they meet the needs of employers and members.”
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