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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.

Latest pensions documents

Letter to FST re low earners in net pay scheme   info
Letter to Financial Secretary to the Treasury about the issue of pension tax relief for low earners in net pay schemes.

Letter from John Glen re pension tax relief for low earners in net pay schemes   info
Response from Economic Secretary to the Treasury to letter about the issue of pension tax relief for low earners in net pay schemes.

Letter to pension minister re potential RPI CPI statutory override   info
Letter to pension minister expressing opposition to the possibility of re-opening the issue of allowing employers to unilaterally change the index for increasing pensions from RPI to CPI.

Letter to Cabinet Office re ACPs paid by Carillion   info
Letter to Cabinet Office seeking meeting to discuss redress for ex civil servants made redundant by companies in the Carillion Group.

AEAT Pension Scheme - Frank Field Letter - February 2018   info
Letter from Frank Field MP to Pension Minister calling for AEAT Pension Scheme advice to be included in remit of PO or PHSO.