Hill Dickinson
4 Experts
8 Contributions by Hill Dickinson Experts
PRACTICE NOTES
THIS PRACTICE NOTE APPLIES TO TRUST-BASED OCCUPATIONAL PENSION SCHEMES
Occupational pension scheme trustees are generally either individual trustees or corporate trustees. A corporate trustee is typically a private limited company governed by the Companies Act 2006 (CA 2006). Corporate trustees are often installed in one of two ways:
in place of a board of individual trustees for a particular scheme. A trustee company is formed to act solely as the single trustee of that scheme, and the company’s directors effectively step into the role otherwise fulfilled by the board of individual trustees. Those directors are commonly called trustees, although, strictly, they are directors and are more accurately described as ‘trustee directors’. An independent professional trustee company can be appointed as a trustee director to a trustee company of this type
independent professional trustees are usually established as limited companies. They may be
Pensions
PRACTICE NOTES
FORTHCOMING CHANGE :
The Pension Schemes Bill, anticipated to obtain Royal Assent in 2026, would, among other matters, authorise trustees of DB schemes to change scheme rules by resolution so that surplus funds can be paid to the sponsoring employer, and to remove or ease limits created by earlier s 251 resolutions. This will be achieved by introducing a new s 36B into the Pensions Act 1995, while also dispensing with the need for a s 251 resolution under the Pensions Act 2004. The Bill will also allow regulations to set conditions for surplus distributions, ensuring trustee flexibility is balanced with protections for members, which may include:
actuarial certification;
compliance with specified funding frameworks; and
obligatory notifications to members.
The Finance Bill 2026–27 is expected to include measures to support surplus payments being made to members. For more detail, see:
Pensions
PRACTICE NOTES
Although every insurer produces its own policy documentation, they generally follow broadly comparable procedures and contain parallel provisions. In most cases, the documentation pack will consist of the following elements:
a quotation
a policy document setting out the terms and conditions
an acceptance document
Guidance from the Financial Conduct Authority, as set out in PERG 10.3 Q13, indicates that one-off annuity purchases chosen by the pension scheme trustees are highly unlikely to be regarded as constituting ‘day-to-day’ management decisions under the Financial Services and Markets Act 2000 (FSMA 2000). Trustees can therefore, in those circumstances, select the annuity provider without first being authorised under FSMA 2000, but should only proceed after taking advice from a suitably qualified and experienced financial adviser.
This Practice Note outlines a typical buy-in/buy-out process and then examines what the quotation and the policy terms and
Pensions
PRACTICE NOTES
Trustees should be alert to circumstances that can trigger a debt under section 75 of the Pensions Act 1995, so they understand:
when such a liability crystallises, and
when they must act to have it assessed and recovered
They have a general obligation to reclaim their scheme’s assets. If they fail to act properly, and without undue delay, to recover an outstanding sum, this may amount to a breach of trust and could expose them to claims for any loss suffered.
For more on disputes that members may bring under occupational or personal pension schemes, see Practice Note: Pension disputes—avenues available to scheme members; and for trustee protections, see Practice Note: Trustee liability and protection in pensions.
When does a section 75 debt arise?
In summary, a section 75 debt becomes payable to an underfunded defined benefit scheme when:
the scheme is wound up
the employer is insolvent for section 75
Pensions
PRACTICE NOTES
On the transfer of part or all of a business
When part or the whole of a business is transferred, staff move from the current employer (the transferor) to the incoming employer (the transferee). European laws were created to safeguard transferring employees’ rights in these situations, initially via the EU Acquired Rights Directive 77/187/EEC (ARD 1977), later repealed and supplanted by the archived Acquired Rights Directive 2001/23/EC (ARD 2001). In this Practice Note, these are together called the ARD Directives. The ARD Directives were given effect in the UK by the Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794, subsequently revoked and replaced by the Transfer of Undertakings (Protection of Employment) Regulations 2006, SI 2006/246 (TUPE 2006). Although UK implementing laws such as TUPE 2006 form part of domestic law, the underlying directives themselves do not. The directives are not part of UK
Pensions
PRECEDENTS
Response to your letter before claim in proposed judicial review proceedings
Dear [ insert name ]
[ Claimant OR Your Client ]: [ insert proposed Claimant’s full name ][ Defendant OR Our Client ]: [ insert proposed Defendant’s full name ]
[ This [ firm OR department ] represents [ insert Defendant’s full name ] ]. We acknowledge your letter before claim dated [ insert date of the letter before claim ], received at our office on [ insert date of receipt ]. This correspondence serves as our [ client’s ] formal reply in accordance with the Pre-Action Protocol for Judicial Review. We follow the model layout for responding to a letter before claim, as outlined in Annex B of the Pre-Action Protocol for Judicial Review.
The Claimant: [ Insert name of the Claimant ] of [ Insert the address of the Claimant. ] (‘the
Public Law
PRECEDENTS
1 Definitions
1.1 In this Agreement:
Affiliate – in relation to any entity, means any other entity that Controls it, is Controlled by it, or is under common Control with it;
Control – and its variations – means a person’s ability to ensure that an entity’s affairs are carried on in line with that person’s wishes: (i) by holding shares or possessing voting rights in the entity, or (ii) by powers granted by the articles of association or any document governing or relating to the entity; ‘Controlled’ and ‘Controlling’ shall be interpreted accordingly;
[ Customer – [ insert name ] Limited, a company incorporated in [ England ] with registered number [ company number ], whose registered office is at [ address ]; ]
Effective Date – means [ 9 am ] on the date of this Agreement [ insert later date ];
Employment
PRECEDENTS
1 Definitions
Unless the context requires otherwise, capitalised terms take the meanings below. Affiliates are entities in Control, Controlled by or under common Control. Control is the ability to direct an entity via shares, voting rights or constitutional powers. Data Protection Laws include Assimilated Regulation (EU) 2016/679, UK GDPR and the Data Protection Act 2018. The Effective Date is as stated. Employees are those assigned to groupings whose principal purpose is delivering the Services. Employee Liability Information is that required by TUPE Regulation 11. Employment Costs/Liabilities cover pay, benefits and related legal exposures. Services are those in Schedule [ ]. Supplier Personnel are those engaged in delivery. Termination Assistance (and any Termination Assistance Period) are as defined. TUPE Regulations means the Transfer of Undertakings (Protection of Employment) Regulations 2006...
The Schedule TUPE provisions
Application: service provision change; stated exclusions.
Trade unions: existing
Employment
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