Our partners have a firm understanding of the issues that cause pension scheme trustees to seek legal advice and support.
Arc Pensions Law provides a wide range of services in this area, from the establishment of new DC arrangements to the winding up of the most complex DB schemes. Whether the scheme you are involved with is DB, DC, hybrid, private or public sector, single-employer, multi-employer or a Master Trust, Arc Pensions Law is well-positioned to support you. These pages refer only to a selection of our most commonly-used services. Our capabilities are by no means limited to these areas, and so do not hesitate to enquire if your needs are more niche.
DC Schemes
Recent years have seen a significant growth in defined contribution (or ‘money purchase’) pension schemes, accompanied by increased regulation relating to management.
We advise employers on strategies and issues in managing defined contribution schemes. Our team of experts can assist with:
- management of occupational (trust based) pension arrangements
- working with GPP providers and master trusts
- communicating with employees
- dealing with salary sacrifice arrangements
- proper process for selecting funds including default funds, and
- strategy for dealing with changing tax treatment (annual allowances, life time allowances and 2015 Budget ‘freedoms’)
Discrimination
Discrimination law has caused problems for pension schemes ever since 1990, when schemes were required to ‘equalise’ pensions for men and women, providing them with the same standard retirement age.
It took almost 20 years for the courts to clarify requirements and the solution still necessitates careful legal analysis. Since then, there have been further rules on discrimination relating to:
- disability
- part-time worker status, and
- sexual orientation and marriage/civil partners.
Dealing with discrimination risks requires an understanding of a range of issues, from the use of comparators to objective justification. Issues are rarely straightforward – improving benefits for one group may be discriminatory against another. Arc Pensions Law can ensure you navigate these issues in a practical and appropriate manner.
Investment
Investment products are becoming increasingly complicated. Trustees and sponsors face a growing number of considerations when setting investment strategies, and it can be a confusing course to navigate.
A successful investment strategy requires ensuring a sound legal basis for the investment or third party appointment. It is equally important that the scheme’s legal rights are understood and, where necessary, contracts are effectively negotiated. Arc Pensions Law can help trustees understand the legal structure and associated risks of their scheme investments, working constructively with advisers to provide clear advice that avoids duplication. We also have experience in acting for sponsors and asset managers, helping to disentangle legal complexities in accordance with their own priorities. Our expert team can help with:
- Trustee investment powers and duties
- Drafting and amending statements of investment principles (SIPS)
- Governance of investment sub-committees
- Terms of pooled investment funds and unit linked policies
- Agreements for investment managers, fiduciary managers and custodians
- Arrangements for stock lending and repos
- ESG and ethical considerations
- Asset security assessments, and
- Preparing for and executing buy-ins.
We also help DC schemes address the specific challenges that arise from statutory and regulatory intervention. Our experience in this area includes:
- default charge cap restrictions
- setting default strategies
- changing member fund options, and
- appointing a new (or first time) platform provider.
Master Trusts
The team at Arc Pensions Law can offer advice and support on either establishing or operating a Master Trust.
We have participated in the establishment of several industry wide trusts, and are highly adept at reviewing platform provider contracts, advising on asset security and offering expertise on a range of other operational issues. Recent increased regulation and the likelihood of further developments has made advice in this area particularly crucial. We understand that controlling adviser fees is vitally important for any defined contribution arrangement, and especially so for a Master Trust. One advantage of being a pensions-only practice is that we can offer a range of fee approaches to suit the needs of our clients. Economical operating costs are particularly vital in a Master Trust environment, and we aim to rise to that challenge and exceed expectations.
Member Disputes
Pension schemes are complex to manage and the details of historic activity can be obscure.
Most schemes will at some point be subject to complaints or claims from members. Our team of experts can clarify legal obligations and rights, making sure that disputes are properly managed to ensure that both trustees and employers understand their commitments. As well as providing legal clarity, our lawyers provide practical solutions to disputes that comply with the obligations under the internal dispute resolution procedure, the Pensions Advisory Service claims and any progression to the Pensions Ombudsman. Whilst we believe that most issues can be dealt with without progressing to the arcane and expensive world of High Court litigation, sometimes this can be the only remaining option. Once this route becomes desirable or inevitable, Arc Pensions Law works with litigators to ensure that the complex world of pensions law is clearly laid out and to provide the overall guiding strategy to reach a successful conclusion.
Safe Settlement
Many defined benefit pension schemes are no longer open to accrual and relate to a membership that is no longer connected to the business.
They have become decoupled from the corporation and are often simply a liability and creditor, only vaguely connected to employees. From the point of view of the business, it often makes sense to move towards de-risking and eventual winding up. Arc Pensions Law’s team has deep experience in this area and knows the importance of preparing a scheme for the process. Our advice covers issues such as:
Preparing for a buy-in:
- Checking the terms that apply on future events (pension increases, deaths)
- Advising on remedial action for overpayments and underpayments
- Checking that administration practice accords with documentation
- Validating that pensions currently in payment have been correctly calculated
- Closing ‘Barber windows’
- Legally formalising administration practices, and
- Codifying discretions.
Co-ordinating the auction and contract process:
- Clear analysis of legal entitlements and mismatches with admin practice
- Identifying the objectives of the parties and the path to buyout
- Advising on the shape of benefits to insure
- Specifying benefits in an insurer-friendly format
- Negotiating annuity contract and supporting documents, and
- Providing legal advice to ‘sign off’.
Preparing for buyout:
- GMP equalisation
- Benefit specification and audit
- Bulk transfer to a new scheme
- Bulk annuity purchase if not in place already
- Statutory employer reconciliation, and
- Partial termination and demerger.
Scheme Funding
A great deal has been written on the issue of the funding of defined benefit pension schemes over the years and the topic continues to provide many sleepless nights for employers.
We can help you to navigate the legal issues relating to, amongst other things:
- undertaking employer covenant review and communicating with the trustees
- integrated risk management
- funding for discretionary benefits
- negotiation of scheme funding arrangements with the trustees
- regulator intervention, and
- putting in place asset-backed contributions, contingent assets and other funding mechanisms.
Arc Pensions Law provides informed, practical assistance to employers and sponsors dealing with scheme funding negotiation, strategic planning to manage funding over the longer term and protecting the employers’ interests in documenting any agreement reached.
Scheme Governance and Compliance
The last decade has seen an upsurge in regulation and guidance relating to pension schemes and their governance.
These developments can at first seem confusing and even contradictory. At Arc Pensions Law, we know it is the basic rules that matter most – the obligations of the trustees to administer the scheme and the duties of the sponsor as trust settlor and employer. We can guide you through these concepts and explain how the guidance and regulatory materials fit together. With our practical, clear advice, you can ensure that your scheme complies with its obligations and deals effectively with any regulatory queries or investigations.
Scheme Mergers
The number of occupational pension schemes continues to shrink as an increasing number of small schemes look to merge in order to benefit from economies of scale and deal effectively with regulatory and compliance issues.
A merger often makes sense in terms of cost and time management, saving on duplicated fees and avoiding separate trustee boards. However, the merger process itself is complex and there are many regulatory pitfalls. The team at Arc Pensions Law is highly adept and experienced in this area. We take all issues into consideration, from the balance of powers to funding, regulatory notifications to tax implications and sectionalisation to trustee appointments. We help to ensure that the process is carried out smoothly and swiftly, verifying that issues are dealt with in full, that the resulting scheme operates effectively and that the appropriate cost and time saving measures have been taken.
Trustee Advice
The last thirty years have seen a constant increase in regulation, legislation and guidance relating to the role of the pension scheme trustees.
At Arc Pensions Law, we believe that pension scheme trustees require more than simply having problems identified; they need clear, practical solutions and advice on how to navigate the complexities that touch all areas of the trustee’s role. Our highly experienced team understands that trustees require the full range of defined benefit, defined contribution and hybrid schemes, whether large boards or sole appointments. Our advice is tailored to the individual needs of clients’ schemes. We assist with benefit queries, use of discretions, funding, administrative and investment issues that trustees deal with in the course of their duties. Our advisors can help to manage roles and responsibilities effectively, assisting in the development of strategies to ensure best practice in pension scheme management.
Our Services
Services for Trustees
We have a firm understanding of the issues that cause pension scheme trustees to seek legal advice and support.
Services for Employers and Sponsors
Dedicated, specialist legal support for employers and other scheme sponsors across a range of issues.
Regulatory, Tax and Public Sector
Occupational pension scheme support for sponsors, trustees or professional adviser, in the private or public sectors.
Distress and Winding Up
Support for clients who are initiating, responding to or grappling with the implications of change.
Services for Law Firms and Other Professionals
We are experienced in working with other firms when specialist pensions law advice is needed.