6 June 2005 - Employers required to consult on future changes to occupational and personal pension provision - draft regulations issued for comment
New regulations will mean employers will no longer be able to make major changes to their pension scheme without first consulting the scheme’s members, announced Pensions Minister Stephen Timms today.
A consultation document on the draft regulations has been published today. The changes would require employers to consult with active and prospective members, and their representatives, on significant changes to their occupational or personal pension provision.
Announcing the requirements, Stephen Timms said:
“Our proposals, which have been widely welcomed, will mean that employees will now have a voice about any important proposed change to their pension scheme. It is important that people have an understanding of their pension scheme and feel they also have a part to play in the running of it. These regulations will give members that.
“These Regulations provide the fuller detail of the requirements for employer consultation on pension changes which we set out in the Pensions Act 2004.”
Draft Regulations issued by DWP set out the criteria which the employer is required to satisfy before a change can be implemented. The two sets of regulations include details on the types of changes that will trigger the requirement to consult and the protections for nominated representatives carrying out their duties in respect of these regulations.
The consultation on these draft Regulations will run until 26 August 2005. Depending on the response to the consultation, the Government will be seeking to make and lay both sets of the Regulations for implementation on 6 April 2006.
Notes for editors
- Provision in the Pensions Act requires that where the employer, trustees or managers of a pension scheme wish to make a major or significant change to future pension arrangements then the employer must provide information and consult on the proposed changes before making that change. Regulations provide the technical detail of this requirement.
- The requirements will affect employers with more than 150 employees from 6 April 2006, employers with more than 100 employees from 6 April 2007 and employers with more than 50 employees from 6 April 2008. This phased implementation is in line with the requirements in DTI Information and Consultation Regulations 2004.
- The consultation document is on the DWP website at: http://www.dwp.gov.uk/publications/dwp/2005/occ_pen_schemes/oppscer06.pdf
- DWP is aiming to make and lay these regulations late in 2005 to come into force alongside the provisions in the Act on 6 April 2006.
- DWP is aware that aspects of pension issues may be undertaken by different personnel within the business environment and is planning to issue guidance on the legislative requirements for use by all. Following consultation on the content of this guidance DWP aim to publish it on the DWP website around January 2006. This will allow businesses time to familiarise themselves with the provisions prior to coming into effect in April 2006.
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