Consultation by employers
Section 259: Consultation by employers: occupational pension schemes
948.This section provides a power for regulations to be made prescribing the circumstances in which an employer in relation to an occupational pension may be required to consult certain persons before prescribed decisions are made by the employer, or the trustees or managers about changes to the scheme. It provides a power for regulations to prescribe the types of decisions leading to major or significant changes to occupational pension schemes that will trigger the requirement to consult. It also provides a power for regulations to be made requiring that trustees or managers of an occupational pension scheme may not make a prescribed decision in relation to that scheme unless they have first notified the employer of the proposed decision and they are satisfied that the employer has undertaken any consultation required by the regulations.
949.Subsection (1) enables regulations to be made to prescribe which employers will be obliged to consult prescribed persons, and will enable certain employers to be exempt from the requirement to consult. There is power to prescribe which decisions will trigger the consultation requirement and power to prescribe how the consultation should take place.
950.Subsection (2) enables regulations to be made that may require trustees or managers of an occupational pension scheme not to make a prescribed decision, unless they have first notified the employer of the proposal to make a prescribed decision and they are satisfied that the employer has undertaken the consultation process as required under subsection (1).
951.Subsection (3) provides that the validity or otherwise of a prescribed decision in relation to an occupational pension scheme is not affected by any failure to comply with regulations made under this section. Subsection (4) refers to section 261 which contains further provisions about regulations made under this section.
Section 260: Consultation by employers: personal pension schemes
952.Subsection (1) of this section provides a power to make regulations requiring prescribed employers who have direct payment arrangements in place for their employees in respect of a personal pension schemes to consult certain prescribed persons in a prescribed manner before making a prescribed decision in respect of the personal pension scheme.
953.Subsection (2) provides that the validity or otherwise of any decision prescribed for the purposes of subsection (1)(b) is not affected by any failure to comply with regulations made under this section. Subsection (3) refers to section 261 which contains further provisions about regulations made under this section.
Section 261: Further provision about regulations relating to consultation
954.Subsection (1) of this section provides that for the purposes of this section “consultation regulations” means regulations under section 259 or 260.
955.Subsection (2) provides that consultation regulations may be made specifying how consultation must be carried out including making provision for the time periods for consultation, the information that must be provided to those consulted, and who is to be consulted, including any discretion the employer may have as to the persons to be consulted. The prescribed requirements may also contain provision about representatives that employees may have and the method of selecting those employees. Subsection (2) also makes provision for regulations to be made to protect employee representatives (such as Trade Union and Information and Consultation (I&C) representatives) involved in the pensions consultation process from suffering any detriment or unfair dismissal by reason of carrying out their consultation duties, and to ensure they are given adequate time and remuneration to carry out their consultation duties. This mirrors existing protection provided to employee representatives by reason of the Employment Rights Act 1996 and the protection that is proposed for I&C representatives.
956.Subsection (2) also provides for regulations to be made enabling any requirement to consult on future pension changes to be waived or relaxed by order of the Regulator in appropriate circumstances. The section also makes provision for regulations to require the employer to communicate to the trustees or managers of the scheme any representations received by the employer as part of the consultation process.
957.Subsection (3) provides that where employers, trustees or managers have obligations imposed on them by the consultation regulations, they must, if required by the Regulator, provide information to the Regulator to show that they have complied with those obligations. Subsection (4) provides for regulations to be made identifying the type of information to be provided to the Regulator under subsection (3) as proof of compliance, and the form, manner and time period within which it must be provided.
958.Subsection (5) makes it clear that where employers have other duties to consult on changes to future pension arrangements those duties are unaffected by the new consultation regulations.