Can my employer reduce the amount they pay into my defined contribution pension scheme?

Last updated: 25 Nov 2020

Employers who are furloughing staff will have to decide whether to carry on with their current contribution structure or whether to reduce contributions to reflect the grant received from Government.

If an employer wants to reduce the amount that they pay into a pension scheme, there is a general requirement to consult with affected employees.

It is the Pensions Regulator who enforces this requirement and they have the power to waive or relax the need to consult. The Pensions Regulator have published guidance that in set circumstances, employers will not be required to consult staff under the Occupational and Personal Pension Schemes Regulations 2006. This relaxation only applies if the employer wishes to temporarily reduce their employer contributions for furloughed staff only where the employer has made a claim under the Coronavirus Job Retention Scheme.

If your employer is proposing to reduce their contribution to your pension scheme, please contact your workplace rep who can receive support from our negotiating teams.

When an employer calculates the pension contribution due for a furloughed worker who has agreed a salary sacrifice arrangement for pension contributions, the obligations under the salary sacrifice agreement continue to apply, as do the requirements in the pension scheme rules.

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