Tata Consultancy Services signs £1.5 billion contract with UK's NEST

Earlier this year, UK's largest workplace pension scheme had ended its $1.8 billion deal with Atos midway

Tata Consultancy Services (TCS) announced that it has expanded its partnership with UK’s National Employment Savings Trust (NEST). The deal that potentially covers 18 years is worth £1.5 billion (approximately $1.9 billion).

“The contract will be for a minimum term of 10 years, with an optional extension period of up to five years, and the option of an additional period of up to three years for exit. The total contract value is indicative and covers this potential 18-year period,” said an email from NEST, confirming the deal size and tenure to Business Standard.

On the tenure of the deal, a spokesperson for NEST said: “While the exact costs are commercially sensitive, we can confirm that under our current estimates, the total contract cost falls within the total estimated contract value of £1.5 billion, as published in the contract award notice.”

 

NEST, UK’s largest workplace pension scheme, announced the expansion of its long-standing partnership to focus on digitally transforming NEST’s scheme administration services, delivering enhanced member experiences and furthering the scheme’s mission of delivering better retirement outcomes for people across the UK.

As part of the partnership, TCS will help NEST transform its administration services using a digitally enabled, omnichannel platform powered by TCS BaNCS.

It will leverage the latest technologies and data analytics to deliver personalised, self-directed experiences to members. This will enable NEST’s 12 million members and 1 million employers to access the right information at the right time, in a way that suits them best.

NEST and TCS have worked closely since 2011 when the digital, auto-enrolment pension scheme was first launched. Responsible for end-to-end administration services across all aspects of the scheme, TCS built a greenfield operation with a user-friendly, multi-channel, self-serve model, and a robust core that easily scaled as NEST became the provider for millions of workers saving for their retirements.

“I am looking forward to continuing our journey with TCS and exploring the opportunities ahead of us. 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, NEST.

This deal is of significance as earlier this year, NEST ended its 18-year deal with French outsourcing firm Atos worth £1.5 billion (about $1.8 billion). The deal was concluded within two years of the deal being signed.

“The interests of our members are always our priority and drive every decision we make and we’re rightly ambitious about what we can achieve for them,” he added.

For TCS, this deal also holds importance as recently its $2 billion worth deal with Transamerica Life Insurance Company ended before its stipulated tenure. The deal was signed for a period of 10 years. TCS has two to two and a half years to transition the processes to the company and would have completed a total of eight years on the deal.

The UK seems to be turning out to be a strong market for the company. In recent times, some of its largest deals have come from the UK. The $723 million with insurance player Phoenix Group, the 10-year deal with Marks & Spencer, and the latest Teacher’s Pension Scheme in England and Wales.

“The purpose-driven partnership between NEST and TCS resulted in an immensely successful pension plan for the UK workforce, that is now a global benchmark on how an innovative, user-friendly, auto-enrolment pension scheme should be run,” said Vivekanand Ramgopal, president, BFSI products and platforms, TCS.