CHAPTER 2 - PENSIONS

Abstract

This chapter describes the legal background and statuary requirements of pension in Great Britain. Trust law provides the legal basis for most pension schemes, and there has been some discussion as to whether a new statutory basis akin to that relating to companies should be introduced. Peripheral statutory changes not affecting the basic principles of trust law as applied to pension schemes relate to preservation contracting out and equal access to schemes. To obtain Inland Revenue Approval, pension funds must be established under irrevocable trusts, which mean that the assets are legally distinct from the employer's assets, and beyond the reach of creditors, thus giving employees a measure of security that the assets supporting their benefits will be there when they retire. The rules of a scheme set out the terms under which it is to be operated. Any statutory requirements arise from the effect of the Companies Act on the accounts of the sponsoring employer. Schedule 8 of the Companies Act 1948 requires companies to disclose any provisions for pensions.