Other pension issues for employers

The automatic enrolment regime, introduced on 1 October 2012, required employers to enrol all eligible jobholders automatically into a qualifying pension scheme (and enrol all non-eligible jobholders who opt in) and pay a minimum level of employer contributions on behalf of those jobholders. The duty was phased in gradually, with the largest employers coming in first. The provision of pension benefits has therefore become an inevitable part of the employment relationship between employer and employee.

Besides their automatic enrolment obligations, employers and their advisers will, among other things, need to be aware of:

  1. their legal duties in relation to pension provision (including stakeholder provision and automatic enrolment)

  2. the relationship between employees’ contractual pension rights and their pension rights arising under the pension scheme trust

  3. the issues that arise where employers wish to make changes to employees’ pension arrangements

  4. the statutory obligations on employers to consult their employees on pension changes (both under pensions law and employment law)

  5. issues that arise when implementing a salary sacrifice scheme for employee pension contributions

  6. issues relating to termination of employment (in particular, the pension

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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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