The National Employment Savings Trust (Nest) has extended its outsourcing contract with Tata Consultancy Services (TCS) for another decade.
It has been a TCS customer since 2011, when the auto-enrolment pension scheme was first launched by the UK government. TCS took responsibility for end-to-end administration services across the scheme, building a greenfield operation with a user-friendly, multi-channel, self-service model.
In 2019, Nest, a public sector organisation, launched a £1.5bn tender to find a new provider for the digital delivery of administration services in preparation for its existing contract with TCS ending this year. The longest possible contract duration was 18 years, though the minimum term was 10 years.
Worth a reported £840m over the 10-year period, the deal will see TCS focus on improving the digital experience for Nest’s 12 million members and one million staff, using TCS’s BaNCS software as a service (SaaS) aimed at finance firms.
TCS uses application programming interfaces (APIs) to enable third parties such as fintech firms and payroll providers to integrate with Nest. It also provides data analytics services to help Nest personalise services for its members and give them and Nest staff access to the information they need at the right time.
“We have a strong foundation after many years of working together, and they’ve proven their ability to deliver successfully for a scheme the size and complexity of Nest,” said Gavin Perera-Betts, chief customer officer at Nest. “This puts us in an excellent position to further advance our operations and build a truly digital offering that delivers a superior customer experience long into the future.”
Nest was set up by the government to ensure every UK employer could offer a workplace pension to their employees. It has become the largest workplace pension scheme in the country by membership, with a third of the working population expected to have a Nest retirement pot by the late 2020s. Nest said by the end of the next decade it expects to have around £100bn assets under management.
TCS recently had another big win in the UK pension sector when the Department for Education awarded it a contract to manage over two million teachers’ pensions in a 10-year contract that will see the scheme administration digitally transformed. It won the contract from Capita, which had run the service for over 20 years.
Similar to its work with Nest, TCS will use its experience to create a digital-first, self-service pension experience, which will enable account access for pension members at any time and give them personalised insights to help them make informed decisions.
These deals are a significant UK public sector wins for TCS. The sector has been difficult to break for Indian IT services firms, despite being huge players in the UK private sector. But TCS has begun to build a good public sector customer base in the UK.
According to Tussell, which analyses government spending data, TCS made just under £31m in sales to the UK public sector in 2017, and this figure increased to £52m by 2019, before the pandemic slowed things down. There is huge potential for growth in the UK public sector for TCS and other Indian services firms.