Pensions - Gowling Wlg

Key points Amendment or modification powers generally are found in scheme rules not in pensions legislation Pensions legislation restricts the way a scheme's modification power can be used Pensions Act 1995: Section 67 onwards protects accrued rights to pension benefits Section 67 also restricts the way changes can be made from defined benefit or final salary benefits to defined contribution or money purchase benefits Section 67 also restricts the way changes can be made which might reduce the rate of a pension Trust law requires trustees to act in members' interests and this applies to decisions to agree to scheme modifications Section 68 Pensions Act 1995 provides a statutory power to make specific modifications regardless of the powers contained in the scheme rules Additional considerations arise where the scheme is contracted out and section 37 of the Pension Schemes Act 1993 imposes additional formalities in such cases