union for life

Changing the pension scheme: can the employer do it?

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Can your employer change your pension scheme?

Many employers are already in the process of changing their pension arrangements or plan to do so. Members often ask if such proposals are lawful and Prospect has taken legal advice on a number of occasions.

The hard fact is that in almost all cases the employer will have the right to terminate or amend pensions provision for employees. There is no legal requirement on the employer to make any pension provision for employees; except that, if employees are not in, or able to join, an occupational pension scheme or a group personal pension to which the employer contributes at least 3%, then the employer must designate a stakeholder pension scheme and provide a payroll deduction facility.

However, there are three possible routes for a legal challenge to an employer's proposals

  • with regard to their powers under the trust deed
  • there may be contractual issues
  • there may be issues of misrepresentation.

This article - which can only be seen by logged-in members - looks only at the first route.