Informing and consulting over pension scheme changes
New Regulations are in place to ensure that employees are notified in advance of changes to their employer's occupational or personal pension scheme. This guidance note examines the new legislation and its implications.
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The Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 apply from 6 April 2006 to employers with more than 150 employees.
The Regulations apply in relation to proposals to make "listed changes" to occupational pension schemes, and to personal pension schemes involving direct payment arrangements.
Listed changes relate only to changes to active or prospective members' future service benefits, not to changes to accrued rights.
A proposal to make a listed change may be made by an employer or a third party such as a scheme trustee or manager.
Where a listed change is proposed, the employer must provide prescribed information to the employees and their representatives.
Consultation must take place about the listed change with employee representatives.
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Potentially significant new information and consultation obligations in relation to pensions came into force on 6 April 2006. Larger employers are now required to provide information and to carry out consultation where they - or others, such as scheme trustees - are proposing "listed changes" to active or prospective members' pension arrangements.
Before any decision is made in relation to a listed change, notice of the change - along with background information - must now be given to all employees who are affected members of the pension scheme, with consultation then being required with trade unions, works councils or elected representatives.
This guidance note considers the background to the new requirements, anticipates how they will work in practice and considers some key areas of uncertainty - including how the new legislation will impact on corporate transactions.
Context and purpose
The increasing cost of running pension schemes is causing many employers to re-examine whether their pension cost can be reduced through changes to their scheme or the benefits provided under it. The principle underlying the new obligation to inform and consult in relation to pension scheme changes is to ensure that employees are notified in advance of any changes that may have a significant impact, and to provide an opportunity for meaningful consultation with employee representatives before a decision to implement the changes is taken.
The framework of the new information and consultation obligation is set out in ss.259 to 261 of the Pensions Act 2004. The Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 (SI 2006/349) (the consultation Regulations)1, which contain details of what is required and supplement ss.259 to 261, took effect on 6 April 2006.
The new information and consultation obligation affects most employers offering occupational pension schemes, or personal pension schemes involving direct payment arrangements such as a group personal pension plan or a stakeholder arrangement. It applies only to proposed changes that will affect benefits for future service.
Where such a proposed change will affect an active or prospective member of a relevant pension scheme, the consultation Regulations will apply whether the change has been proposed by the employer or the trustees or - in the case of a multi-employer scheme - any other person, such as the scheme principal employer or sponsor. The requirement to inform and consult falls on the employer. If it is not the employer that is proposing to make the change, the party making the proposal is obliged to notify the employer and to satisfy itself that the employer has undertaken the necessary consultation.
Obligations under the consultation Regulations supplement other existing information and consultation requirements, such as those under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE Regulations) and the Information and Consultation of Employees Regulations 2004 (SI 2004/3426) (ICE Regulations). To mitigate the risk of overlap between the different information and consultation obligations, two changes have been made to the ICE Regulations. The standard provisions (the statutory fallback that applies if a negotiated agreement cannot be reached) will not apply in respect of matters covered by the consultation Regulations if prior written notification is given to the information and consultation representatives. The same will apply in relation to a negotiated agreement under the ICE Regulations (again subject to prior written notification), but only where the negotiated agreement has been in place since before 6 April 2006.
Application
The consultation Regulations apply in relation to occupational pension schemes and certain personal pension schemes. An occupational pension scheme is defined in s.1 of the Pension Schemes Act 1993. For the purposes of the consultation Regulations, a personal pension scheme is one where direct payment arrangements exist in respect of one or more members of the scheme, ie where the employer agrees to contribute to the scheme in respect of the members.
In the case of an occupational pension scheme that is not a multi-employer scheme, unless the employer is excluded (see Exceptions below), the consultation Regulations apply to it and to the scheme trustees or managers (reg. 3(1)(a)).
In the case of a multi-employer scheme, the consultation Regulations apply to all non-excluded scheme employers and to the scheme trustees or managers, as well as to any other person who, under the rules of the scheme, has the power to make a listed change affecting the scheme (reg. 3(1)(b)). This latter category would include a scheme principal employer.
In relation to personal pensions schemes, the consultation Regulations apply to an employer providing a personal pension scheme where direct payment arrangements exist in respect of one or more of its employees (reg. 3(1)(c)).
In all three cases, application is subject to certain exceptions, outlined in regs. 4 and 5.
Employers excluded from the scope of the consultation Regulations are:
any employer in relation to a public service pension scheme;
any employer in relation to a small occupational pension scheme, ie a scheme with fewer than 12 members and satisfying the other conditions set out in reg. 4(4);
any employer in relation to an occupational pension scheme with fewer than two members;
any employer in relation to an occupational pension scheme that is an employer-financed retirement benefits scheme;
any employer in relation to an overseas scheme that has not been registered with HM Revenue and Customs under the Finance Act 2004, with its main administration outside the EU; and
any employer in relation to a personal pension scheme where no employer contributions fall to be paid towards the scheme.
Like the ICE Regulations, the consultation Regulations are being implemented on a staggered basis. Currently they apply only to those employers employing more than 150 employees in Great Britain. They will be extended to apply to any employer employing more than 100 employees in Great Britain from 6 April 2007, and to employers employing more than 50 employees in Great Britain from 6 April 2008.
The relevant thresholds are calculated by reference to each individual employer, regardless of how many employers are participating in a multi-employer scheme. For example, if a corporate group has 10 separate companies, none of which employs more than 150 employees, the consultation Regulations will not apply to any of the companies, even if the aggregate number of employees significantly exceeds 150.
It is also important to bear in mind that the test is based on the number of employees employed by the employer, not the number of scheme members affected. For example, the consultation Regulations will apply to an employer with 200 employees, even if only 10 of them are members of an occupational scheme that will be affected by a proposed change. Conversely, if there are only, for example, 149 employees, the consultation Regulations will not apply, even if all 149 are affected members of the pension scheme.
Obligation to inform and consult
Under reg. 6, no person to whom the consultation Regulations apply may decide to make a listed change that affects an occupational pension scheme, or a personal pension scheme where direct payment arrangements exist, unless prior consultation has taken place in accordance with the Regulations.
If the proposal to make a listed change affecting such a scheme is made by a person other than the employer - for example, by the scheme trustees or managers or, in relation to a multi-employer scheme, a non-employer with power to make a listed change - that person may not make the decision to implement the change without first notifying each employer, including those excluded from the consultation obligation (reg. 7(1)).
Assuming that it is not excluded, an employer is then obliged to provide specified information and to enter into consultations about a proposed listed change if its employees appear to it to include affected members (reg. 7(3)).
Affected members
Affected members are the active or prospective members of a scheme to whom a listed change relates (reg. 7(4)).
The definition of a "prospective member" is set out in reg. 2. In relation to an occupational pension scheme, a prospective member is any person who, under the terms of his or her contract of service or the rules of the scheme:
is able, if he or she chooses, to become a member of the scheme;
will be able to become a member of the scheme if he or she continues in the same employment for a sufficiently long period;
will be admitted to the scheme automatically unless he or she elects not to become a member; or
may be admitted to the scheme, subject to the consent of the employer.
In relation to a personal pension scheme, a person is a prospective member if, under the terms of his or her contract of service, he or she would be eligible, on becoming a member of the scheme, to have employer contributions paid in respect of him or her.
The precise scope of the definition of a prospective member is unclear in some respects. As noted above, the term includes someone who may be admitted to the scheme "subject to the consent of the employer". Presumably, this is not meant to catch the situation where a scheme is closed to new entrants but could subsequently be opened by agreement between the employer and the trustees. Does the position differ if the employer has reserved a unilateral power to allow future entrants? On the face of it, the answer would appear to be yes. It seems unlikely, however, that the prospective member category would include individuals who have not started work but who have agreed to become employees, as they will not yet be subject to a "contract of service".
What is clear is that the consultation Regulations apply only in relation to employees who are active members or prospective members. They do not apply in relation to pensioners and deferred members, although the changes to s.67 of the Pensions Act 1995 that also came into force on 6 April 2006, restrict the scope for changes affecting accrued rights.
It is not clear if employees working outside the UK are covered, although there is no express exclusion.
Listed changes
The consultation Regulations apply only in relation to what are known as "listed changes". Different listed changes apply in respect of occupational pension schemes and personal pension schemes.
The listed changes that affect occupational pension schemes are set out in reg. 8, and are:
increasing the normal pension age - defined in s.180 of the Pension Schemes Act 1993 as, broadly, the earliest date at which the member has the right to draw a pension - specified in the scheme rules for all members or members of a particular description;
preventing any new members, or new members of a particular description, from being admitted to the scheme;
preventing the future accrual of benefits under the scheme for, or in respect of, all members or those of a particular description;
removing the liability to make employer contributions towards the scheme in respect of all members or those of a particular description;
introducing member contributions in circumstances in which no such contributions were previously payable;
making any increase in member contributions by, or on behalf of, all members or members of a particular description;
in relation to money-purchase benefits, reducing employer contributions towards the scheme in respect of all members or members of a particular description;
in relation to non-money-purchase benefits, changing some or all of the benefits that may be provided under the scheme to, or in respect of, all members, or members of a particular description, to money-purchase benefits;
in relation to non-money-purchase benefits, changing, in whole or in part, the basis for determining the rate of future accrual of benefits under the scheme for, or in respect of, all members or members of a particular description;
in relation to non-money-purchase benefits, modifying the scheme under s.229(2) of the Pensions Act 2004 to reduce the rate of future accrual of benefits; and
in relation to non-money-purchase benefits, making any other reduction in the rate of future accrual of benefits under the scheme for, or in respect of, all members or members of a particular description.
The listed changes that affect personal pension schemes are set out in reg. 9, and are:
ceasing employer contributions towards the scheme in respect of all members or members of a particular description;
making any reduction in employer contributions towards the scheme in respect of all members or members of a particular description; or
making any increase in member contributions by, or on behalf of, all members or members of a particular description.
The listed changes have deliberately been drawn very widely, and will catch a broad range of prospective changes to pension arrangements, including introducing or increasing member contributions; reducing employer contributions to money-purchase arrangements; closing a scheme to new entrants; reducing the rate of pension accrual; and converting final-salary arrangements into money-purchase arrangements. Interestingly, percentage limits on contribution increases and reductions, which were included in the draft version of the consultation Regulations, have been removed from the final version.
There are certain circumstances where a change will not require prior consultation.
This will be the case where all the affected active or prospective members of the scheme were notified before 6 April 2006 of the proposal to make the change (reg. 6(4)).
No consultation will be required where consultation has already taken place under the consultation Regulations in respect of a proposal to:
prevent the future accrual of benefits or remove liability to make employer contributions in relation to an occupational pension scheme; or
cease employer contributions in relation to a personal pension scheme;
and, as a result of that consultation, there is an alternative proposal to reduce the rate of accrual or pay reduced contributions (reg. 6(5)-(7)).
There will be no requirement for consultation where the change is made for the purpose of complying with a statutory provision - to give effect to a legislative change, for example, or for the purposes of complying with a determination made by the Pensions Regulator (reg. 10(1)(a) and (b)).
Finally, there will be no obligation to consult where a listed change has no lasting effect on a person's rights to be admitted to a scheme or on the benefits that may be provided under it (reg. 10(1)(c)). This would cover those changes that are purely administrative.
Areas of uncertainty
There are some potentially important areas where it is not entirely clear whether a consultation obligation will be triggered. These include:
where a company ceases to participate in a group occupational pension scheme on the sale of the company out of the group, or where there is a similar cessation of participation on the transfer of a business under the TUPE Regulations;
changes in pensionable pay, including pay cuts; and
changes to ancillary benefits.
Impact on transactions
It is common for subsidiaries within a group of companies to participate in a group pension scheme. The scheme will normally provide that a subsidiary's participation will terminate on its ceasing to be connected with the principal employer.
As a matter of commercial practice, it is increasingly common for the subsidiary company to stop participation in the group pension scheme immediately. The past practice of allowing an interim period of participation post-sale, during which the subsidiary could set up its own pension arrangements, has become much less common. Part of the reason for this is the underlying funding obligations owed by employers to pension schemes, combined with the recent changes to employer debt arising under s.75 of the Pensions Act 1995 - under which employers withdrawing from a multi-employer scheme are now required to make a payment to the scheme calculated on a buyout basis.
On the face of it, it would appear that such a cessation is a listed change. In relation to the employees of the subsidiary company, it is clear that the cessation of participation will mean the end of future accrual of benefits under the seller's scheme - the reg. 8(1)(c) listed change.
In addition, it seems that this will be a listed change even if the subsidiary company sets up a mirror scheme and arranges for relevant employees to continue to accrue benefits on exactly the same basis as under the seller's scheme. This is because the consultation Regulations refer to the particular scheme, rather than to the changes in the underlying benefits.
On the assumption that the seller's scheme is a multi-employer scheme, it is clear that the decision to sell the subsidiary company - and for it to cease to participate in the seller's scheme - is being made by the relevant holding company. It therefore seems likely that this company will qualify under reg. 3(1) (b) as "any other person who, under the rules of the scheme, has the power to make a listed change affecting the scheme".
In practice, the rules of the seller's scheme will include specific provision dealing with cessation of participation by a relevant employer. Commonly, this will envisage cessation:
at the direction of the principal employer (or perhaps the trustees); or
where continued participation would prejudice approval of the scheme by HM Revenue and Customs.
If the cessation of future accrual under the seller's scheme by individual members employed by the exiting subsidiary company is envisaged under the terms of the scheme, the question then is whether a decision to sell the subsidiary constitutes a change that affects an occupational pension scheme so as to trigger the relevant information and consultation obligations.
One argument is that such a decision does not in fact "affect" the terms of the scheme at all. The cessation of accrual flows automatically from the cessation of participation and is envisaged by the terms of the scheme itself. It is not a change to the scheme, but a feature of the scheme's operation. However, the obligation under the consultation Regulations is not limited to a change to the rules of the scheme itself; it therefore seems implicit that the obligation could extend to cover changes envisaged by the rules.
Although it is unlikely that it was intended that this should be the case, it does appear that an information and consultation obligation might well be triggered under the consultation Regulations in these circumstances. If this is the case, it is likely to have significant implications for transactions. In particular, the need to consult with members and their representatives for at least 60 days before the relevant decision is made could have important consequences with regard to timing and confidentiality.
The regulator's view on this remains to be seen, although it is possible that it may choose to use its powers under reg. 19 and dispense with the consultation obligations in these circumstances.
Similar issues arise in relation to a decision by an employer to agree a business transfer to a third-party company in circumstances where this will mean that the relevant employees cease to participate in the employer's pension scheme. However, any liability for failure by the transferor to comply with the consultation Regulations should not pass to the transferee, because of the pension exclusion in reg. 10 of the TUPE Regulations.
Changes in pensionable pay
It is uncertain whether a change in pay that is pensionable, but which leaves the accrued rate - 1/80th, for example - unchanged, is a listed change on the basis that it is a change in the rate of future accrual of benefit under reg. 8(1)(g). Whether or not it is will depend on whether the concept of pensions accrual relates only to the fraction or if it also affects the multiplier, ie pensionable salary. The likelihood is that such a change will not create a situation where an obligation to consult arises.
Changes to ancillary benefits
It is also uncertain whether a change in, for example, the level of death benefits under a scheme could be viewed as a change in the basis for determining the rate of future accrual of benefits. Again, it would seem unlikely that this would be the case.
The information and consultation process
Requirement to provide information
Where a listed change is proposed, each employer must provide information about the proposal to all affected members employed by it and their representatives (reg. 11(1)).
The specified information must describe the proposed listed change and state the effects that it would have, or is likely to have, on the scheme and its members, and must be provided in writing before the consultation begins. The information must be accompanied by any relevant background information, and indicate the timescale over which it is proposed to introduce measures giving effect to the change. The way in which the information is given and its content must be appropriate to enable the affected members' representatives to consider, conduct a study of, and give their views to the employer on the impact of the change.
No further guidance is given in the consultation Regulations as to how detailed the relevant background information must be. In its guidance2 on the Regulations, the Department for Work and Pensions takes the view that the employer should always consider and, where appropriate, provide:
the total number of prospective and active pension scheme members on whom the change will impact;
an explicit statement of the categories of scheme member who will be exempt from the proposed change;
the type of change that is proposed;
an illustrative worked example to give an indication of how the proposed change will affect the employees' future pension arrangements;
the date on which it is planned that the proposed change will take effect; and
basic information about the regulator's role with regard to the legislation, including details about how the scheme members or their representatives can contact it.
It supplements this with the further guidance set out in box 1.
Obligation to consult
Once the relevant information has been provided, the employer is required to enter into consultations. Regulation 12 provides that, where prescribed arrangements for consultation already exist, the employer must consult in accordance with those arrangements. The employer may choose under which one or more of those arrangements it wishes to consult.
The prescribed arrangements are arrangements under which employees who appear to the employer to be affected members are represented by:
a recognised independent trade union;
information and consultation representatives (under the ICE Regulations);
representatives identified in accordance with a pre-existing agreement (within the meaning of the ICE Regulations); or
representatives elected in accordance with the requirements in the consultation Regulations - provided that the election takes place before any of the above arrangements are made.
Consultation may also take place directly with the employees if this is provided for under an applicable pre-existing or negotiated agreement under the ICE Regulations.
Where no prescribed consultation arrangements already exist, or, if they do, where they do not cover all affected employees, the employer may arrange to consult with representatives elected for the purpose (reg. 13). Regulation 14 specifies the requirements for the election of such representatives. If the interests of any affected members are not represented by elected representatives, the employer must also consult directly with those members about the change. Similarly, if no representatives have been elected, the employer must consult directly with the affected members.
Conducting consultation
Under reg. 15, the employer is required to make arrangements to ensure that, so far as is reasonably practicable, the consultation covers all affected members. Both the employer and the relevant representatives are under a duty to work in a spirit of cooperation, taking into account the interests of both sides. However, it is not entirely clear how this duty will work in practice if the decision on the change is ultimately to be taken not by the employer but by, for example, the scheme trustees.
The guidance emphasises that consultation should include an exchange of views and the establishment of a dialogue between the employer and the individuals being consulted.
At the outset of the consultation, the employer is obliged to notify the employee representatives of any date set for the end of the consultation or for the submission of written comments. The consultation Regulations also provide that an appropriate period must be allowed for carrying out the consultation and that this must be no less than 60 days.
The employer will need to consider the responses received before making any final decision (reg. 16(3)).
If the listed change was proposed by a third party, as soon as reasonably practicable after the consultation is complete, the employer must report to the third party on any views that were expressed to it in a non-written format and forward any written comments to it. In the, perhaps unlikely, event that no responses are received, the employer must notify the third party of this fact. The third party is then required to take reasonable steps to satisfy itself that consultation was carried out in compliance with the consultation Regulations, and to consider any responses received before deciding whether or not to make the listed change.
Unfortunately, it is not clear what happens if the result of the consultation is that the employer or trustees are prepared to change the proposals, for example to make them more favourable. The guidance indicates that the information and consultation process must then be repeated, unless the changes fall within the extreme cases specifically excluded - for example, a move to a reduced future accrual instead of cessation of future accrual (see Exclusions above). On a practical level, employers may want to try to avoid this by including the possibility of changed proposals within their original consultation.
Employment rights and protection
In common with much other recent employment legislation, the consultation Regulations prescribe various rights and protection for employees involved in the consultation process. These include:
a right to reasonable paid time off during working hours to enable employees to perform their functions as representatives;
a right not to suffer unfair dismissal by reason of performing any function or activity as a representative, or requesting paid time off to act as a representative;
a right (for any employee, whether a representative or not) not to suffer unfair dismissal by reason of seeking to take advantage of rights enjoyed under the consultation Regulations; and
a right not to suffer detriment in the same circumstances.
Role of the regulator
The regulator has various powers in relation to the consultation Regulations. These include the power to waive or relax the information and consultation obligation, but only where the regulator is satisfied that it is necessary to do so in order to protect the interests of the scheme members in general (reg. 19). An application to the regulator for the obligation to be waived or relaxed may be made by the employer.
Sanctions for non-compliance
The consultation Regulations state that the only remedy for failure to comply with the information and consultation obligations is by way of a complaint to the regulator (reg. 18). Sections 259(3) and 260(2) of the Pensions Act 2004 confirm that the validity of any decision made is not affected by any failure to comply with the consultation Regulations. In other words, a failure to consult in advance of making a listed change will not invalidate the change.
In the event of a lack of compliance with the Regulations, the regulator could issue an improvement notice under s.13 of the Pensions Act 2004, directing the person in default to take steps to remedy the contravention. Civil penalties - including a fine of up to £50,000 - can be imposed on the defaulter for failure to comply with such a notice.
In practice, it is quite difficult to see how the regulator will be able to act other than retrospectively in relation to a breach that has been notified to it. The DWP guidance on the consultation Regulations suggests, however, that a civil penalty sanction can be applied following a breach and before an improvement notice has been served. It is expected that the regulator will issue guidance on this point in due course.
Summary
Coming hard on the
heels of the ICE Regulations, the consultation Regulations extend the
circumstances in which employers are expected to engage in consultation with
employee representatives. They introduce an important new obligation on
employers that are seeking to make specified changes to the pension arrangements
of active or prospective members of their pension scheme. Although the
Regulations do not restrict employers' ability - or that of others, such as the
scheme trustee - to make changes to employees' pension arrangements, they do
require a full period of prior notification and consultation. It will clearly be
important for employers to factor the necessary timetable for information and
consultation into their change-planning process.
This feature was
contributed by Nicholas Squire, a partner in the employment, pensions and
benefits group at Freshfields Bruckhaus Deringer.
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Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 11 Requirement to provide information (1) In relation to a proposal to make a listed change affecting an occupational or personal pension scheme, each relevant employer to whom regulation 7(3) applies must provide information about the proposal to - (a) such of his employees as appear to him to be affected members of the scheme, and (b) any representatives of such members who are to be consulted under regulation 1 2(2)(a) or (3) or 13(2). (2) The information provided under paragraph (1) must - (a) be in writing, (b) be provided before the start of consultation under regulation 12 or 13, (c) describe the listed change and state what effects it would (or would be likely to) have on the scheme and its members, (d) be accompanied by any relevant background information, (e) indicate the timescale
on which measures giving effect to the change are proposed to be
introduced, and |
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Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 12 Consultation under existing arrangements (1) If arrangements specified in paragraph (2) or (3) exist in relation to his employees, each relevant employer to whom regulation 7(3) applies must consult about a listed change in accordance with such one or more of those arrangements as he may choose. (2) The specified arrangements are arrangements under which employees appearing to the employer to be affected members - (a) are represented by - (i) in the case of employees of a description in respect of which an independent trade union is recognised by the employer, the representatives of the trade union, (ii) in the case of employees of a description which has elected or appointed information and consultation representatives, those representatives, or (iii) where there exists one or more pre-existing agreements which apply to any of the employees, any representatives identified in accordance with such agreement or agreements; or (b) are to be consulted directly in accordance with the terms of a negotiated agreement or a pre-existing agreement. (3) In any case where - (a) an election of representatives as described in regulation 13(2) has taken place before any arrangements referred to in paragraph (2) are made, and (b) the interests of the affected members are represented by such representatives, the specified arrangements also include arrangements for consultation of those representatives. (4) "Independent trade union" and "recognised", in relation to an independent trade union, have the same meaning as in the Trade Union and Labour Relations (Consolidation) Act 1992. (5) "Information and consultation representatives" and "negotiated agreement" have the same meaning as in the Information and Consultation of Employees Regulations 2004. (6) "Pre-existing agreement" - (a) means an agreement
between an employer and his employees or their representatives which
satisfies the conditions set out in regulation 8(1)(a) to (d) of the
Information and Consultation of Employees Regulations 2004 and which has
not been superseded, but |
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Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 13 Consultation in cases not covered by regulation 12 (1) This regulation applies to a relevant employer to whom regulation 7(3) applies if (and only if) any of the employees who appear to the employer to be affected members are not covered by consultation arrangements referred to in regulation 12. (2) Where, for the purposes of engaging in consultations under these Regulations, representatives of any affected members have been elected in an election which satisfies the requirements of regulation 14(1), the relevant employer must consult with those representatives about a listed change. (3) If the interests of any affected members are not represented by representatives who are consulted under paragraph (2), the relevant employer must also consult directly with those members. (4) If no representatives have been elected as described in paragraph (2), the relevant employer must consult directly with the affected members about a listed change. (5) Consultation about this regulation - (a) is required only in
relation to the affected members falling within paragraph (1),
and |
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Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 14 Election of representatives (1) The requirements … are that - (a) the employer must make such arrangements as are reasonably practical to ensure that the election is fair; (b) the employer must determine the number of representatives to be elected so that there are sufficient representatives to represent the interests of active members and the interests of prospective members; (c) the employer must determined whether the active and prospective members should be represented by representatives of all such members or by representatives of particular descriptions of such members; (d) before the election, the employer must determine the term of office as representative of active and prospective members; (e) the candidates for election must be active or prospective members of the scheme on the date of the election; (f) no active or prospective member may unreasonably be excluded from standing for election; (g) all active or prospective members on the date of the election are entitled to vote for member representatives; (h) the members entitled to vote may vote for as many candidates as there are representatives to be elected to represent them or, if there are to be classes of representative for particular descriptions of member, may vote for as many candidates as there are representatives to be elected to represent their particular description of member; (i) the election is conducted so as to secure that:- (i) so far as is
reasonably practicable, those voting do so in secret,
and |
1 In conjunction with the Occupational Pension Schemes (Consultation by Employers) (Modification for Multi-employer Schemes) Regulations 2006 (SI 2006/16).
