Scheme amendments

Amendment of occupational pensions schemes—employer and trustee considerations

Sponsoring employers and trustees of occupational pension schemes may need to amend a scheme's provisions for a variety of reasons. For example, the employer may wish to:

  1. change the scheme's benefit structure

  2. take account of legislative changes

  3. close the scheme to new members

  4. close the scheme to future accrual of benefits, or

  5. introduce a new defined contribution section

When amending a pension scheme, the main considerations for an employer are:

  1. whether it is acting in accordance with its implied duty of trust and confidence

  2. whether the change is permitted under employees' contracts of employment, and

  3. whether the employer needs to consult its employees on the change

When amending a pension scheme, the main considerations for trustees are:

  1. whether the amendment is in accordance with their fundamental duties under trust law, and

  2. whether they are subject to a conflict of interest

Where the sponsoring employer proposes an amendment that will affect members' future service benefits but requires trustee consent, trustees may wish to explore whether they would be

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