UK - HSBC is to take on the National Employment Savings Trust (NEST) with a workplace pension scheme aimed at small companies.

HSBC said the product - jointly developed with Towergate Financial, an independent financial adviser - would target firms with fewer than 20 employees ahead of the introduction of auto-enrolment in 2012.

Rob Pearce, head of workplace retirement services at HSBC commented: "Many employers and their advisers want to offer a pension which meets and exceeds the minimum standards of NEST."

A NEST spokeswoman declined to comment on likely competition within the currently unpensioned sub-market, pointing to a statement from chief executive Tim Jones saying: "We welcome any initiative that will improve pension provision and help culture UK citizens achieve financial security in retirement."

Earlier this month ATP, the DKK476bn (€63.8bn) Danish pension scheme, announced it would move into the UK market with a low-cost pension platform that included a default option. ATP had been an early bidder for the contract to manage NEST but subsequently pulled out.
 
Meanwhile, the switch from the retail price index (RPI) to the consumer price index (CPI) has cut the British Airways (BA) net pension deficit by £1.3bn (€1.5bn). 

The deficit is for BA's two defined benefit pension schemes, the New Airways Pension Scheme, as well as the Airways Pension Scheme. Both saw scheme liabilities fall by £770m due to the realignment with CPI.
 
Under the terms of recovery deal agreed last year ahead of its long-delayed merger with Spanish carrier Iberia, the airline agreed to pay annual contributions of £330m to address the deficit.

BA is not the company first pension scheme to see a significant reduction in its pension deficit by virtue of the switch to CPI, which does not factor in housing costs. The BT Pension Scheme saw its deficit reduced by more than half to £2.3bn when it applied the new inflation measure.

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