The draft regulations issued by the Department for Work and Pensions set out the types of changes on which employers will be required to consult workers and the criteria they will have to satisfy before a change can be implemented.
According to the agency’s Web site , regulators intend that the consultation provision will be triggered by decisions such as closing a plan completely, closing a plan to future accruals, closing a plan to new members, changing from a defined benefit plan to a defined contribution or hybrid plan, and significantly reducing or removing an employer contribution to a defined contribution plan or group personal pension plan.
“Our proposals, which have been widely welcomed, will mean that employees will now have a voice about any important proposed change to their pension scheme,” pensions minister, Stephen Timms, told the newspaper. “It is important that people have an understanding of their pension scheme and feel they also have a part to play in the running of it. These regulations will give members that.”
According to the report, the rules will initially affect employers with more than 150 employees. Those with 100 and 150 workers will fall under the legislation starting April 6, 2007, while those with 50 to 100 employees will have until April 6, 2008 to comply.
The government agency will take public comment on the draft regulations until August 26, 2005. Depending on the response, the rules could be effective as of April 6, 2006, the Guardian said.
In a separate initiative, the government has also called on trade unions, charities and other non-profit groups to come up with ideas on how best to encourage workers to save for retirement – offering cash for the best ideas. The deadline for applications is September 2, 2005.