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