Pensions

Pensions

This Overview outlines the Practice Note material available in our Pensions subtopic.

Pensions—general considerations for employment lawyers

Payment into pension schemes that are registered with Her Majesty's Revenue and Customs (HMRC) has significant tax advantages for both employers and employees (see: ‘The pensions tax regime’ below). Pension schemes are also a way of attracting and retaining employees.

Under European law pension benefits are considered to be deferred pay, so they are subject to the principle of 'equal pay for equal work'. A significant amount of indirect discrimination litigation has occurred in the past few years; the majority of which had been brought by part-time workers, the majority of whom are women.

Employers may run occupational pension schemes for the benefit of their employees. Occupational pension schemes tend to be either 'final salary' (also known as 'defined benefit') schemes or 'money purchase' (also known as 'defined contribution') schemes:

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final salary schemes commit the scheme, under the deed and rules, to paying members a set annuity on retirement
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money purchase schemes require employees and employers to pay a set amount each year into the scheme, usually expressed as a percentage of

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Latest Practice Management News

WEC publishes report on UK parental leave system

The Women and Equalities Committee (WEC) has published a report evaluating the UK’s parental leave system. It identifies key shortcomings, including low statutory parental pay, limited paternity leave, and complex eligibility criteria for shared parental leave (SPL). The report finds that the statutory pay rate—significantly below the National Living Wage—creates financial hardship and discourages uptake, particularly among fathers and other parents. The WEC recommends a series of reforms. While acknowledging the direct fiscal impact, it argues that the wider social and economic benefits, such as those achieved through increasing mothers’ labour market attachment and career progression and narrowing the household gender pay gap, would justify the investment. The government has two months to respond.

LGPS—wide-ranging reforms proposed to help boost benefits and tackle inequality

Pensions analysis: Building on the government’s wider Make Work Pay agenda, there are a number of reforms to the Local Government Pension Scheme (LGPS) that are currently being consulted on that could help reduce discrimination and lead to better outcomes for members. Written by David Gallagher, partner & head of Pensions, and Daniel Fowler, director, at Fieldfisher.

Government report explores hypothetical pension salary sacrifice changes

Law360: The government could be considering the removal of tax breaks on workplace pensions salary-sacrifice plans, experts have warned, as part of an effort to increase revenue in the next budget.

Government consults on local government pension fixes to tackle discrimination

Law360: The government proposes making all maternity, shared parental and adoption leave automatically pensionable for members in the Local Government Pension Scheme (LGPS), among a raft of other changes it said would boost benefits and end 'years of discrimination' when it published a consultation on 15 May 2025.

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