The following Pensions guidance note provides comprehensive and up to date legal information covering:
THIS PRACTICE NOTE APPLIES IN RELATION TO SCHEMES THAT WERE CONTRACTED-OUT SALARY-RELATED SCHEMES IMMEDIATELY BEFORE 6 APRIL 2016.
Employers of schemes that were contracted-out salary-related (COSR) schemes immediately before the abolition of DB contracting-out on 6 April 2016 have been given a statutory amendment power, exercisable until 5 April 2021, which they can use to amend their scheme rules so as to offset any increase in employer national insurance contributions (NICs) costs caused by the abolition of DB contracting-out (or more specifically, caused by the repeal of NICs contracted-out rebates under section 41 of the Pension Schemes Act 1993 (PSA 1993)).
Importantly, this statutory amendment power:
can be exercised by the employer without the consent of the trustees. This is a big advantage over a scheme's amendment power which is usually shared with the trustees (and which thus requires trustee consent), especially as trustees cannot agree to an amendment which is not in the scheme members' interest (such as an amendment which seeks to pass on the increase in employer NICs costs to the member, eg by increasing member contributions)
generally overrides any scheme rule or regulations that would otherwise prevent the employer from making changes to the scheme
The legislative provisions introducing this statutory amendment power can be found in:
section 24 and Schedule
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