Aspects of scheme participation

Participation in an occupational pension scheme requires sponsoring employers and their advisers to have a detailed working knowledge of a wide range of aspects and principles of pensions law.

In particular, employers and their advisers need to be aware of:

  1. the duty of employers that participate in a defined benefit occupational pension scheme to notify certain employer-related events to the Pensions Regulator

  2. issues that arise when admitting a new employer to participation in the scheme

  3. issues that arise when substituting another employer in place of the principal employer of the scheme

  4. issues that arise if the employer changes into a Limited Liability Partnership

Changing to a Limited Liability Partnership (LLP)—pension issues

The establishment of LLPs in place of existing business vehicles has proven increasingly popular over recent years, largely due to their flexibility and the protection they offer to members. A number of pensions issues can arise when an employer participating in a pension scheme changes its business vehicle to an LLP, depending on the nature of the group’s pension arrangements and the actual change contemplated. These include:

  1. determining whether the employees' employments

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DWP to evaluate pension scheme climate disclosure regime as part of government’s modernisation of climate disclosure and transition planning in UK financial markets

As part of its efforts to modernise the UK’s sustainability reporting framework, the government has introduced three consultations intended to “unlock billions in clean energy investment”. In doing so, the government is consulting on how to implement its manifesto commitment to mandate UK-regulated financial institutions (including banks, asset managers, pension funds and insurers),  as well as FTSE 100 companies,  to develop and implement credible transition plans that align with the 1.5C goal of the Paris Agreement. The government sees transition planning as a vital part of its commitment to secure the UK’s position as the green finance capital of the world. Notably, one consultation from the Department for Energy Security and Net Zero, seeks views on how the government should implement this commitment by ensuring an orderly transition aligned with global climate goals, aiming to enhance transparency to facilitate efficient capital allocation, enabling companies to seize opportunities from the global net zero transition, and bolstering the growth and international competitiveness of the UK’s financial services industry.  In particular, the consultation from the Department for Energy Security and Net Zero indicates that during 2025, the Department for Work and Pensions (DWP) will conduct a review of the Occupational Pension Schemes (Climate Change, Governance and Reporting) Regulations 2021, SI 2021/839, utilising evidence provided by the Pensions Regulator (TPR). The DWP regards this review as a logical starting point to assess the effects of the current climate disclosure regime (put in place following the recommendations from the Taskforce on Climate-Related Financial Disclosures (TCFD)) and to consider future steps for climate change reporting. In parallel with the TCFD review, the DWP has tasked TPR with evaluating the feasibility of transition plans within pension schemes. Accordingly, TPR is organising an industry working group, including key stakeholders and major occupational pension schemes, and is set to deliver its findings to the DWP later in 2025.

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