India's largest software services and consulting company, Tata Consultancy Services Limited (TCS), has won a 10-year contract to set up and administer the new UK's national pensions accounts in a deal that could be potentially worth around £600 million (Rs4,122 crore).
UK's Personal Accounts Delivery Authority (PADA) said yesterday that TCS has been named as the successful bidder for the new National Employment Savings Trust (NEST) scheme administration services and the contract with TCS will be signed later this month.
NEST is the UK new low-cost pension scheme, previously known as personal accounts that any employer can use to meet new workplace pension duties starting from 2012. The scheme is being designed specifically to meet the needs of low-to-moderate earners and their employers.
The contract with TCS is divided into two stages and runs for 10 years, with possible extensions for up to a further five years.
The first stage, where TCS will be paid £25 million, will run to October 2010, allowing TCS to set up and administer NEST and prior to the expiry of the first stage, a decision will be made on whether to proceed with the contract for the remainder of the contract term.
The total value of the contract will depend on how many people opt for the NEST, but based on PADA's assumptions of between 4 to 5 million individuals and about 8,000 employers opting for the scheme, the contract could be potentially worth around £600 million over 10 years.