Companies in the UK are sitting on a multi-million pound pensions time bomb which is set to explode within the next few weeks, according to law firm Pinsent Curtis Biddle.
Firms have until May 9 to present their defences to the employment tribunal against claims made by part-time workers seeking to establish occupational pension scheme rights. After the deadline claimants can only submit their cases through the Pensions Ombudsman.
The rush to submit company defences preventing judgements forcing them to back-date all pension contributions to part-time workers to 1976 follows the House of Lords ruling in February.
Pinsent Curtis Biddle regional head of pensions Simon Ramshaw said the countdown is underway for companies to act before May 9. These claims will have been lodged with companies as long ago as the mid 1990s and stayed tucked away in a cardboard box in some dusty corner while UK and European Courts have deliberated over the part-time employees' rights.”
He said the extra costs which companies are faced with will put more pressure on pension schemes which in some schemes this could result in pension scheme shortfalls. The industry predicts employers face a bill of over £15bn if all claims are upheld.
Ramshaw said: For many companies this is going to prove a major headache. Staff in their HR departments may well have changed since the mid '90s with new people possessing no detailed knowledge of the claims backlog they face. And in that period we have seen substantial restructuring among companies with mergers and demergers, delistings and takeovers. There will be many questions about which company is liable to meet the costs of the claims.
Employment and pensions specialists at Pinsent Curtis Biddle have set up a combined taskforce to help companies deal with the urgent problems that this looming deadline imposes.
We are offering to hand-hold companies through this process and take the problem away from them by producing risk assessments, analysing the claims they are facing and helping them to formulate strategic responses. We are already working with a number of FTSE 100 companies who have recognised the potential problems this last-minute rush will create, Ramshaw added.
Over 60,000 companies have already submitted their defences since the House of Lords Ruling which the Nottingham office of the employment tribunal said was “rising daily”.
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