Pension Law Reform (1993) Cm 2342, also known as the Goode Report after its leading author, Roy Goode, was a UK government commissioned inquiry into the state of pensions in the United Kingdom, which ultimately led to a set of statutory reforms in the Pensions Act 1995.
In the 1970s, a government white paper recommended that members be given more control over running their pension scheme money, particularly by electing at least half the seats on pension trust boards. [1] In the 1980s and 1990s a series of scandals and corporate collapses led to losses to occupational pension funds, and brought public pressure for changes to pension regulation. In particular, Robert Maxwell, the proprietor of the Mirror News Group had suddenly died and it was then revealed that he had been stealing millions of pounds from his employees' pension schemes.
The Goode Report recommended legislation for the participation of scheme members in pensions. Trusts were a sound legal vehicle for ‘protecting the pension promise’. In trust documents, employers write the scheme to themselves and nominate all trustees, even in defined contribution schemes where members bear all risks, and this was unsatisfactory since:
members earn their benefits by their work and their contributions. It is their scheme in a very real sense and they have a legitimate interest in its management. ...
But however scrupulous the employer may be, there is no substitute for the discipline of another voice in the decision-making process, who can ensure that the employer-appointed trustees do not allow themselves, consciously or unconsciously, to be unduly influenced by the wishes and concerns of the employer. [2]
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In the Pensions Act 1995 sections 16 to 21, the Conservative government required that employees and beneficiaries had the right to elect representatives to trust boards, unless the employer opted out. In the Pensions Act 2004 the opt out was removed so that one-third of pension trusts or corporations were elected, and the minister could raise this to one-half. [3]
In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodic employee contributions come directly out of their paychecks, and may be matched by the employer. This legal option is what makes 401(k) plans attractive to employees, and many employers offer this option to their (full-time) workers. 401(k) payable is a general ledger account that contains the amount of 401(k) plan pension payments that an employer has an obligation to remit to a pension plan administrator. This account is classified as a payroll liability, since the amount owed should be paid within one year.
A pension is a fund into which amounts are paid regularly during the individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be:
United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK can rely upon a minimum set of employment rights, which are found in Acts of Parliament, Regulations, common law and equity. This includes the right to a minimum wage of £9.50 for over-23-year-olds from April 2022 under the National Minimum Wage Act 1998. The Working Time Regulations 1998 give the right to 28 days paid holidays, breaks from work, and attempt to limit long working hours. The Employment Rights Act 1996 gives the right to leave for child care, and the right to request flexible working patterns. The Pensions Act 2008 gives the right to be automatically enrolled in a basic occupational pension, whose funds must be protected according to the Pensions Act 1995.
The Pensions Act 1995 is a piece of United Kingdom legislation to improve the running of pension schemes.
The State Earnings Related Pension Scheme (SERPS), originally known as the State Earnings Related Pension Supplement, was a UK Government pension arrangement, to which employees and employers contributed between 6 April 1978 and 5 April 2002, when it was replaced by the State Second Pension.
The Universities Superannuation Scheme is a pension scheme in the United Kingdom with £89.6 billion under management as of August 2021. It has over 400,000 members, made up of active and retired academic and academic-related staff mostly from those universities established prior to 1992. In 2006, it was the second largest private pension scheme in the UK by fund size. The headquarters of Universities Superannuation Scheme Limited (USS) are in Liverpool.
The Employees' Provident Fund Organisation (EPFO) is one of the two main social security organization under the Government of India's Ministry of Labour and Employment and is responsible for regulation and management of provident funds in India, the other being Employees' State Insurance. The EPFO administers the mandatory provident fund, a basic pension scheme and a disability/death insurance scheme. It also manages social security agreements with other countries. International workers are covered under EPFO plans in countries where bilateral agreements have been signed. As of May 2021, 19 such agreements are in place. The EPFO's top decision-making body is the Central Board of Trustees (CBT), a statutory body established by the Employees' Provident Fund and Miscellaneous Provisions (EPF&MP) Act, 1952. As of 2018, more than ₹11 lakh crore are under EPFO management.
Pensions in the United Kingdom, whereby United Kingdom tax payers have some of their wages deducted to save for retirement, can be categorised into three major divisions - state, occupational and personal pensions.
In Australia, superannuation or "super" is a retirement savings system. It involves money earned by an employee being placed into an investment fund to be made legally available to fund members upon retirement.
A defined contribution (DC) plan is a type of retirement plan in which the employer, employee or both make contributions on a regular basis. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts plus any investment earnings on the money in the account. In defined contribution plans, future benefits fluctuate on the basis of investment earnings. The most common type of defined contribution plan is a savings and thrift plan. Under this type of plan, the employee contributes a predetermined portion of his or her earnings to an individual account, all or part of which is matched by the employer.
The National Employment Savings Trust (Nest) is a defined contribution workplace pension scheme in the United Kingdom. It was set up to facilitate automatic enrolment as part of the government's workplace pension reforms under the Pensions Act 2008. Due to its public service obligation, any UK employer can use Nest to meet its new workplace duties as set out in the Pensions Act 2008.
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the Commonwealth and the United States. Trusts developed when claimants in property disputes were dissatisfied with the common law courts and petitioned the King for a just and equitable result. On the King's behalf, the Lord Chancellor developed a parallel justice system in the Court of Chancery, commonly referred as equity. Historically, trusts have mostly been used where people have left money in a will, or created family settlements, charities, or some types of business venture. After the Judicature Act 1873, England's courts of equity and common law were merged, and equitable principles took precedence. Today, trusts play an important role in financial investment, especially in unit trusts and in pension trusts. Although people are generally free to set the terms of trusts in any way they like, there is a growing body of legislation to protect beneficiaries or regulate the trust relationship, including the Trustee Act 1925, Trustee Investments Act 1961, Recognition of Trusts Act 1987, Financial Services and Markets Act 2000, Trustee Act 2000, Pensions Act 1995, Pensions Act 2004 and Charities Act 2011.
Small Self Administered Scheme (SSAS) is a type of UK Occupational Pension Scheme.
Defined benefit (DB) pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum, or combination thereof on retirement that depends on an employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provide defined benefit plans, sometimes as a means of compensating workers in lieu of increased pay.
Cowan v Scargill [1985] Ch 270 is an English trusts law case, concerning the scope of discretion of trustees to make investments for the benefit of their members. It held that trustees cannot ignore the financial interests of the beneficiaries.
Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589 is an English trust law case, especially relevant for UK labour law and UK company law, concerning pension funds and the implementation of a poison pill.
The Pensions Act 2008 is an Act of the Parliament of the United Kingdom. The principal change brought about by the Act is that all workers will have to opt out of an occupational pension plan of their employer, rather than opt in. A second change is the creation of a National Employment Savings Trust, a public pension provider for those who do not have an occupational pensions, which will function as a low-fee pension scheme in competition with existing funds.
The Association of Member Nominated Trustees is an organisation established in September 2010 composed of pension trustees selected by employees or members of private and public sector pension funds in the United Kingdom. It is a non-profit group which seeks to organise employee representatives through sharing information, expertise and coordinating policies for pensions and corporations in which money is invested.
The Pension Schemes Act 1993 is a United Kingdom Act of Parliament that concerns the administration of occupational pensions.
A master trust in the UK is a multi-employer occupational pension scheme.