Legal Practice Notes

The Pension Schemes Act 2021 On 11 February 2021, the Pension Schemes Act 2021 ( PSA 2021) obtained Royal Assent. It amends the Pensions Act 2004 ( PA 2004), introducing measures with significant consequences for corporate and restructuring transactions involving companies or groups that run UK defined benefit schemes, including: Two criminal offences—‘avoidance of employer debt’ and ‘risking accrued scheme benefits’—effective from 1 October 2021. This Practice Note addresses these offences. Broader grounds for the Pensions Regulator ( TPR) to issue a contribution notice ( CN) under its moral hazard powers, making third parties liable to help fund a scheme deficit, via two new threshold tests: the ‘employer insolvency test’ and the ‘employer resources test’. These also took effect on 1 October 2021. For an overview of CNs, see Practice Note: Contribution Notices. Expanded...

This guide is chiefly intended for trainees, newly qualified lawyers and anyone else who is new to, or unfamiliar with, pensions law. A pension scheme is, at its core, a form of savings arrangement set up to provide benefits upon the happening of a triggering event, such as retirement or the death of a spouse, or another person upon whom the beneficiary was financially dependent. Pension schemes take many forms and operate widely in both the public and private sectors, and provision is also made by the State in the guise of the state pension. This guide considers the following examples of the different types of pension scheme: the state pension private sector pensions workplace pensions occupational pension schemes hybrid schemes cash balance schemes employer financed retirement benefit schemes ( EFRBS) personal pension schemes ...

This Practice Note applies to defined benefit and hybrid occupational pension schemes. What is the Pension Protection Fund? The principal role of the Pension Protection Fund ( PPF) is to provide, by way of compensation, payment of members’ benefits up to a prescribed level where a qualifying insolvency event has arisen in relation to the sponsoring employer of an eligible pension scheme. When such a qualifying insolvency occurs, the relevant scheme enters an assessment period, during which the PPF examines the position and determines whether the scheme satisfies the conditions for admission to the PPF. The PPF also performs other functions that sit outside the scope of this Practice Note, including: running the Financial Assistance Scheme ( FAS). Established by the government, the FAS offers a minimum level of benefits to members of qualifying pension schemes who would otherwise forfeit all or part of their pension because their...

Practice Note This Practice Note outlines the formal requirements to be followed when reviewing the terms and preparing the drafting of a financial order that makes provision for pension rights, and highlights potential traps and issues to address when agreeing and settling the order, including practical implementation considerations and the consequences of death. Standard financial orders concerning pensions have been published; see Precedent: Standard order 2.1—financial remedy order. Although the standard orders do not have the status of forms under the Family Procedure Rules 2010 ( FPR 2010), SI 2010/2955, Pt 5, the default position is that they ought to be used, with parties and the court permitted to adapt and refine them to such extent as is appropriate; see Practice Note: Standard orders—general principles......

ARCHIVED : This archived Practice Note offers background material on arrangements and cases where pension liberation was suspected, and where the Pensions Regulator intervened between 2011 and 2018. For guidance on how pension liberation may present, and the associated legal issues, see Practice Notes: Pension liberation—an introduction and Pension liberation and pension scams—legal considerations. Pension liberation has been a concern for many years, but its incidence has risen since 2011. Over that period the Pensions Regulator has appointed a number of trustees, and there have been several reported rulings from the High Court and from the Regulator's Determinations Panel concerning those appointments and/or steps taken directly by the Regulator against individuals operating alleged liberation arrangements. This focus was squarely on pension liberation issues and suspected liberation schemes......

This Practice Note offers an overview of pension liberation—explaining what it is, why it occurs, the common structures and principal features involved, and the issues each party should weigh in practice. For detailed guidance on the legal aspects arising in this context and related matters, see Practice Note: Pension liberation and pension scams—legal considerations. For further material on arrangements suspected of pension liberation and the steps taken by the Pensions Regulator up to 2018, see Practice Note: Pension liberation—actions taken by the Pensions Regulator until 2018 [ Archived]. For further insight into complaints decided by the Pensions Ombudsman concerning transfers of pension funds linked to pension liberation or scams up to 2018, see Practice Note: Pension liberation—key Pensions Ombudsman decisions up to 2018 [ Archived]. The rise of pension liberation In essence, a pension is a mechanism through which an individual, or an...

Pension liberation and other pension scams Over recent years, the pensions sector has shifted from ‘pension liberation’ (see definition below) towards investment scams and frauds that coax savers to transfer their pension pot into unsuitable or exotic assets, which are unlikely to deliver the promised returns and may attract high charges and fees (see definition of ‘pension scam’ below). This Practice Note examines the legal issues arising around pension liberation and other pension scams, including enforcement matters and the actions taken by the Pensions Regulator, the Pensions Ombudsman, HMRC and the Insolvency Service to counter such activity. It also provides practical pointers for trustees and other pension providers—see Practical guidance for trustees/providers, below. As scam methods continue to evolve, pension liberation has become less common. Other pension scams may involve persuading members to transfer their pension savings into occupational pension schemes so as to invest them in...

ARCHIVED : This archived Practice Note examines several significant complaints decided by the Pensions Ombudsman up to 2018, arising from transfers of pension funds linked to pension liberation or pension scams. It is no longer updated and is provided for background reference only. It is not kept up to date and is intended purely as background. For details on the various types of pension liberation and the legal issues that arise, refer to Practice Notes: Pension liberation—an introduction and Pension liberation and pension scams—legal considerations. Numerous complaints have been adjudicated by the Pensions Ombudsman concerning transfers of pension funds associated with pension liberation or pension scams......

An indemnity is a contractual responsibility resting on one of the contracting parties (the indemnifier) and owed to the other contracting party (the indemnified party), that responsibility being for the indemnifier to pay, or otherwise recompense, the indemnified party in respect of specified liabilities incurred or assumed by the indemnified party (such liabilities commonly arising after the contract is signed)......

ARCHIVED : This archived Practice Note relates to the pension freedoms (also referred to as pension flexibilities) that took effect on 6 April 2015. It is not maintained. Prior to 6 April 2015, defined contribution ( DC) pension pots were, broadly, restricted to purchasing a lifetime annuity, being turned into a scheme pension, accessed through drawdown, or paid as a trivial lump sum (for further details, see Practice Note: Retirement options— DC members— How can the pension pot be used on retirement?). In the Budget of 19 March 2014 it was confirmed that, from 6 April 2015, the rules governing DC pension pots and other ‘flexible benefits’ would be relaxed. This relaxation of access to flexible benefits is commonly known as the pension freedoms (or pension flexibilities). The government’s objective in introducing the pension freedoms was to provide members with greater control over their...

This Practice Note contains references to case law of the Court of Justice of the European Union ( CJEU). For guidance on whether EU judgments are binding on UK courts, see Practice Note: Assimilated law — Assimilated case law. On 17 May 1990, the European Court of Justice ruled, in Barber v Guardian Royal Exchange, that the entitlement of men and women to equal pay for equal work, or work of equal value, also embraces the element of remuneration made up of pension benefits. As a result, many schemes needed amendments to their governing documents so as to provide equal pension benefits for men and women. The exercise of implementing the Barber principle became known as equalisation. Although the precise scope of Barber was initially unclear, the outstanding issues were very largely settled by further cases, culminating in Coloroll Trustees v Russell. For further...

THIS PRACTICE NOTE APPLIES TO MONEY PURCHASE ARRANGEMENTS FROM 6 APRIL 2015 From 6 April 2015, new pension flexibilities expanded the retirement choices for DC members and others with ‘flexible benefits’ (in essence, money purchase and/or cash balance entitlements). As part of those reforms, drawdown became more broadly accessible. For background on the changes implemented on 6 April 2015, see Practice Note: Pension freedoms—an introduction [ Archived]. This Practice Note concentrates on the legal framework for drawdown arrangements set up on and after 6 April 2015. It also addresses how pre- April 2015 drawdown is treated from that date. For the rules governing drawdown before 6 April 2015, see Practice Note: Drawdown between 6 April 2011 and 5 April 2015 [ Archived]. What is drawdown? The label ‘drawdown pension’ (often called ‘flexible income’) replaced ‘unsecured pension’ and ‘alternatively secured pension’ used up to 5 April 2011....

This guide is chiefly directed at trainees, recently qualified solicitors and others who are new to, or inexperienced with, pensions law. Disagreements about pension schemes arise in many ways and, depending on the scheme type and the dispute’s character, there are different routes for pursuing them, and the applicable procedures for progressing those disputes can vary considerably. Disputes relating to occupational pension schemes An employee (or former employee) with a complaint about pension entitlements under a trust-based occupational scheme gained during employment may, subject to the specific facts, including the context and documentation on which their position depends, have two main paths to advance their claim: submit a written grievance to their employer—available where the pension issue can be shown to concern contractual rights under the employment contract in force at the relevant time (a contractual claim), or submit a written...

Why is greater transparency required? Over time, the Kay Review, the FCA and the House of Commons' Work and Pensions Committee reached the following findings regarding the disclosure of member-borne costs and charges: Cost information provided to retail customers was not complete. The Kay Review, in particular, determined that outlays tied to implementing exit — for example, performance fees and portfolio turnover costs — were not reported to pension funds even though they were charged to those funds. Disclosure was uneven. In its 2014 Thematic Review TR14/7, the FCA noted that although some investment firms presented customers with consistent, combined charge figures across all relevant documents and platforms, there remained instances of firms quoting different charge figures across multiple documents, making fair comparisons difficult......

CASE HUB ARCHIVED This archived case hub reflects the position as at the decision date of 5 November 2011 and is no longer maintained. For additional details, see the timeline, commentary and related cases Case facts Outline UK merger scrutiny into the completed purchase of Sembcorp Bournemouth Water Investments Limited by Pennon Group. In line with its obligation to refer any water sector merger to a phase 2 inquiry where the parties have UK turnover above £10m, the CMA proceeded to a phase 2 investigation Latest developments On 5 November 2015, the CMA gave unconditional clearance to the deal, upholding its provisional conclusions Parties Pennon Group is a UK-based water utility and waste business. It is among the largest environmental and resource management companies in the UK, with assets of around £5bn. Its subsidiary, South West Water, is one of the UK’s ten water and sewerage companies, delivering water and...

What is an environmental report? Environmental reporting is typically carried out to evaluate site-specific environmental risks and liabilities. They are commissioned for a range of purposes, such as: undertaking due diligence on behalf of a purchaser or vendor of a property or corporate entity responding to regulatory action, or supporting ongoing environmental management by owners or operators Environmental reports can include: contaminated land assessments (desk-based, Phase 1, Phase 2 and remediation) flood risk assessments ground stability appraisals asbestos surveys The extent of data, analysis and assessment required depends on the probability and scale of the risk associated with any given site. An environmental consultant can advise which type of environmental report is needed. See Practice Note: Environmental investigations—types of searches and investigations. Why is peer review...

This Practice Note outlines the disclosure obligations for transactions undertaken by a person discharging managerial responsibility ( PDMR) and persons closely associated with them ( PCAs) under the UK Market Abuse Regulation ( Assimilated Regulation ( EU) 596/2014), and also examines guidance from the Financial Conduct Authority ( FCA) in Chapter 3 of the Disclosure Guidance and Transparency Rules ( DTR) and from the London Stock Exchange in relation to AIM companies. Regulatory background The EU Market Abuse Regulation became applicable across the EU on 3 July 2016. Its stated aim was to put in place a common regulatory framework covering insider dealing, the unlawful communication of inside information and market manipulation (each a form of market abuse), together with measures designed to prevent market abuse so as to uphold the integrity of financial markets in the EU and to bolster investor...

This practical guidance concerns the position prior to the Procurement Act 2023. It addresses public procurement exercises started before the Procurement Act 2023 ( PA 2023) came into effect on 24 February 2025. In-scope procurements initiated on or after that date are subject to PA 2023. Owing to PA 2023's transitional and savings provisions, the earlier public procurement regimes continue to operate as required to enable contracting authorities to finish and administer procurements launched before PA 2023 commenced (ie ongoing procurements). This Practice Note should be interpreted in that light. For background reading, see Practice Note: Introduction to the Procurement Act 2023— PA 2023. Further practical guidance on PA 2023 is provided in a separate subtopic, see: Procurement Act 2023—overview. That subtopic also includes the following Practice Note dealing with contract modification: Contract modification— PA...

STOP PRESS: From 24 February 2025, the principal provisions of the Procurement Act 2023 ( PA 2023) are in effect. Procurements launched on or after that date must follow PA 2023, while those initiated under the earlier regimes must continue to be procured and overseen under those rules, namely: Public Contracts Regulations 2015 ( PCR 2015) Utilities Contracts Regulations 2016 Concession Regulations 2016 Defence and Security Public Contracts Regulations 2011 See Practice Note: Key Implications of the Procurement Act 2023 for Construction Lawyers. PCR 2015 as assimilated law PCR 2015 are EU-derived domestic legislation and therefore constitute assimilated law under sections 2 and 6 of the European Union ( Withdrawal) Act 2018. For practical guidance on the status and construction of assimilated law, see Practice Note: Assimilated law. Where a contracting authority lets a public contract above the relevant financial threshold, it must adopt one of the...

STOP PRESS: From 24 February 2025, the core provisions of the Procurement Act 2023 ( PA 2023) now apply. Any procurement launched on or after that date must proceed under PA 2023, while procedures started under the earlier instruments—the Public Contracts Regulations 2015 ( PCR 2015), the Utilities Contracts Regulations 2016, the Concession Regulations 2016, and the Defence and Security Public Contracts Regulations 2011—must continue to be run and administered in line with those rules. See Practice Note: Introduction to the Procurement Act 2023— PA 2023. PCR 2015 as assimilated law PCR 2015 are EU-derived domestic legislation and therefore constitute assimilated law under sections 2 and 6 of the European Union ( Withdrawal) Act 2018. For practical guidance on the standing and interpretation of assimilated law, see Practice Note: Assimilated law. Public procurement reform The UK public procurement framework stems from EU public procurement law, and was...