UK - Schemes are still awaiting clarification on rules giving fixed-term workers pension rights.
The rules contained within the Employment Act 2002 came into force on October 1.
The £137m Northern Rock Pension Scheme is one of many schemes which has decided to delay making any adjustments to its rules until the government clarifies the position.
Pensions manager and secretary Sally Reynolds said she was unclear whether the two-year vesting period in its scheme rules will be justification enough to exclude fixed-term workers.
She said: “We are waiting for more information to become available. But we’re not closing the door on the matter – we need to be confident about how this issue will be enforced.”
CMS Cameron McKenna partner Mark Atkinson agreed that there was widespread confusion among pension funds on how they could “objectively justify” excluding fixed-term workers.
Commenting on his own client base, he said: “Some have just allowed them in – but this tends to be the bigger companies. Other are looking at giving contributions to stakeholder schemes for fixed-termers at a level that they can be objectively justified.
“Then there’s quite a few that are holding back waiting to see what everyone else does.”
The Department of Trade and Industry has advised schemes to check its guidance notes at www.dti.gov.uk/fixed/fixed-tl512.htm and to contact the employment relations director at the DTI if they need further clarification.
Eversheds head of pensions litigation Giles Orton said that firms in the private sector are tending to view the regulations as a “non issue” because most of their fixed-termers are seasonal workers with no pensions entitlement.
The problem will lie more in the public sector, he added.
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