UK - The reasons companies give for closing final salary schemes should be reviewed to guard against legal claims from employees, lawyers warn.
Hammond Suddards Edge solicitor Oliver Rees said that in light of union activism over pensions closures, many money purchase scheme members are querying employers over the past closure of their defined benefit plan.
He warned: “These issues are being raised to trustees with or without evidence. Schemes should be prepared for these queries and not risk facing a legal dispute.”
He added that if a firm was taken to the pensions ombudsman over a past scheme closure, the case will be looked upon more favourably if the employer had been proactive in reinvestigating the reasons before issues were put to trustees.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.