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Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Legal Developments Worldwide

Articles contributed by Stephenson Harwood

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Companies should plan now to minimise their pension protection levy

August 2007 - Pensions. Legal Developments by Stephenson Harwood.

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The amount that pension schemes have to pay to the Pension Protection Fund (PPF) for the year 2006/07 may have increased by as much as five times the previous year's levy. Employers who ultimately bear the cost of many pension schemes will need to make plans now to ensure the levy payable for the year 2008/09 is kept to a minimum.

Demanding contributions from an employer - have trustee powers been overridden by the Pensions Act?

June 2007 - Pensions. Legal Developments by Stephenson Harwood.

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British Vita Unltd v British Vita Pension Fund Trustees Ltd and another recently examined the effect of the new scheme funding requirements under the Pensions Act 2004 (PA 2004) on a defined benefit occupational pension scheme's contribution rule. It was concluded that trustees may continue to demand contributions according to the contribution rule under the pension scheme until the first schedule of contributions required by the PA 2004 has been entered into. However, once the schedule of contributions is in place, it is not clear whether trustees may continue to demand contributions in excess of the statutory funding objective by using the pension scheme contribution rule.

Financial inducements to give up final salary pensions

May 2007 - Pensions. Legal Developments by Stephenson Harwood.

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The Pensions Regulator has issued guidance setting out how final salary pension scheme employers, trustees and members should deal with the growing practice of offering members some form of financial inducement or incentive (such as cash payment or an enhanced transfer value) to accept a reduction in their benefits or to transfer their benefits into another pension arrangement.

Section 75 - a word of warning

April 2007 - Pensions. Legal Developments by Stephenson Harwood.

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We are seeing more and more cases of problems for multi-employer schemes concerning the triggering of section 75 debts. One potential area of difficulty occurs where an employer ceases to have any active members. This may occur where the underlying business is sold or a restructuring takes place or may just be a result of the maturity of the business. If an employer ceases to have active members and that employer participates in a multi-employer defined benefit occupational pension scheme, it may well trigger a debt. That debt can include a share of orphan liabilities attributable to former participating employers. Therefore, don't fall into the trap of thinking that an employer with a few members necessarily means a small debt.

Statutory scheme funding requirement

April 2007 - Pensions. Legal Developments by Stephenson Harwood.

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Increasingly, employers need to get involved in the contribution setting process to protect their interests. That process is now largely governed by statute and many employers are going through it for the first time. What follows is a summary of those requirements from an employer's perspective.

Beware the employer covenant

March 2007 - Pensions. Legal Developments by Stephenson Harwood.

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Trustees of occupational defined benefit pension schemes (DB schemes) need to know how to assess the strength of the employer covenant as it has become a crucial factor in determining scheme-specific funding and in the progress of corporate transactions. Employers must also be aware that if the covenant is weak, this could stop a corporate transaction in its tracks.

Limits on trustee indemnities – a timely reminder

February 2007 - Pensions. Legal Developments by Stephenson Harwood.

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The introduction of the Pensions Act 2004 provisions requiring trustees of occupational pension schemes to have knowledge and understanding of the law relating to pensions and trusts has prompted many trustees to enquire about the extent to which their sponsoring employer is able to indemnify them. It is therefore worth reminding trustees and employers of the changes in the law in recent years restricting indemnities provided by a company to its directors and trustees that may have been missed following the relentless onslaught of other pensions legislation.

Contingent asset agreements - start getting ready for levy year 2007/08

January 2007 - Pensions. Legal Developments by Stephenson Harwood.

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The Pension Protection Fund's (PPF) guidance for the next levy year (2007/08) was issued in September and is available on its website at www.pensionprotectionfund.org.uk. The guidance covers existing contingent asset agreements which will require re-certification to be effective for levy period 2007/08 and new contingent asset arrangements. Experience has shown that these arrangements require a high degree of compliance (see below) and always take longer to complete than anticipated, and it is advisable to start planning ahead in order to be ready for 31 March.

Act now to avoid a death trap

January 2007 - Pensions. Legal Developments by Stephenson Harwood.

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It is often the case that a company occupational pension scheme provides not only pension benefits for staff in retirement but also lump sum benefits on death for employees. This is generally known as life cover. Due to the recent implementation of s255 of the Pensions Act 2004, trustees and employers will urgently need to review their occupational pension scheme documentation to check whether they should be setting up a separate pension scheme for the provision of lump sum death benefits instead of providing them within the pension scheme.

Pan-European pension schemes – a developing opportunity

November 2006 - Pensions. Legal Developments by Stephenson Harwood.

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Recently, certain pensions consultants have begun actively promoting the set up of pan-European pension schemes, also known as cross-border pension schemes. They are being promoted on the basis that pan-European pension schemes offer the opportunity to save costs, increase administrative efficiency and to retain talented employees. This article summarises our view of the pros and cons of setting up such an arrangement.

Informing and consulting on listed changes to schemes

November 2006 - Pensions. Legal Developments by Stephenson Harwood.

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The information and consultation requirements of the Pensions Act 2004 have now been in force for six months but there are still some important aspects of their application which need clarification. Most important is whether they apply in commercial transactions. If they do, as the Pensions Regulator appears to contend, then it makes the conduct of those transactions very difficult.

Stop press: new age discrimination implementation date

October 2006 - Pensions. Legal Developments by Stephenson Harwood.

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Further to our article covering the pensions aspects of age discrimination in the September edition, the government has announced that the age discrimination regulations, introducing new age discrimination laws, will delay the implementation date of the pensions-related aspects of the new age discrimination until 1 December 2006.

This delay is as a result of the representations made by the pensions industry concerning the impact of the regulations on occupational pension schemes. The government has advised that, during this time, there will also be a further informal review of the exemptions from the age discrimination legislation provided for pension schemes.

New member-nominated trustee laws require immediate action

October 2006 - Pensions. Legal Developments by Stephenson Harwood.

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Trustees of most trust-based occupational pension schemes will need to urgently check what action they need to take to secure compliance with the new requirements relating to member-nominated trustees (MNTs) and member-nominated directors (MNDs), which were introduced on 6 April 2006. These require trustees to ensure that arrangements are not only in place but also implemented to ensure that at least one-third of trustees or directors are member-nominated.

Age discrimination reaches the company pension scheme

September 2006 - Pensions. Legal Developments by Stephenson Harwood.

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Employers and trustees may be shocked to learn that the long tentacles of the new age discrimination laws will extend to and significantly impact on the operation of their company pension schemes. The Employment Equality (Age) Regulations 2006 (the Regulations) outlaw direct and indirect age discrimination. They come into force on 1 October 2006, leaving little time for employers and their pension funds trustees to review and amend scheme documentation and practices in light of age discrimination issues. Failure to do so could result in significant costs and potential claims from employees, and all the associated adverse publicity.