Law firms that run pension schemes are likely to breathe a sigh of relief over government proposals on consulting employees about pension changes, it was claimed last week.

Jane Wolstenholme, a pensions partner at central London firm Wedlake Bell, said: ‘Although these new rules still impose yet another layer of bureaucracy, employers will be pleased to see that the government has been fairly restrained in its attempts to provide better protection for scheme members.’


The proposals, set out in a consultation which ends on 26 August, would mean that employee consultation would not be required for minor changes to contribution rates; employee agreement would not be required (although employers would still need to enter into consultation with an open mind); and the plans would not apply to the employers with fewer than 50 employees.


However, she said factoring consultation time into employers’ plans could slow down the process for improving a firm’s pension position.


‘Employers will have to build in a delay of at least two months for consultation into their plans. That is quite a lengthy and inflexible requirement, so they will have to think ahead,’ she said.


The requirements will affect employers with more than 150 employees from 6 April 2006, those with more than 100 employees from 6 April 2007 and employers with more than 50 employees from 6 April 2008.


Ms Wolstenholme called for this to be based on the number of active employees in or eligible to join the scheme, rather than the total number of employees in the company.