The works council has the right to consent to changes in the pension scheme. The introduction of the Future Pensions Act in the coming years, which means that all pension schemes must be amended, therefore gives the works council an important role.
We expect works councils to spend a great deal of time on this in the coming years, together with their pension advisers.
Changes to pension schemes within industry-wide pension funds generally take place outside the works council’s involvement. However, tens of thousands of companies with their own insured pension scheme cannot ignore the works council when the Future Pensions Act is introduced in their business. The pension scheme, as well as the implementation agreement with the pension provider, simply has to be changed and adapted under the new law. The works council’s right of consent applies to the pension scheme and also to parts of the implementation agreement, insofar as it contains matters affecting the pension employment condition. That is often the case, so the works council’s right of consent in relation to pensions is extensive.
The works council is entitled to all relevant information about the change to the pension employment condition. Because of the complexity of the matter, the works council will need a pension lawyer or pension expert. The works council has the legal right to engage such an expert at the company’s expense. The works council has an important role throughout the entire transition process towards the introduction of the new pension scheme based on the Future Pensions Act. This includes the background and reasons for the change, the compensation the employer offers to certain groups of employees, and communication to employees.
The works council therefore has the right of consent for changes to pensions. After that, individual employees must still agree to the new pension agreement. For the works council, it is important to start working on the Future Pensions Act before a consent request has even been submitted. For example, by mapping out the current scheme, consulting its constituency about wishes regarding the scheme adapted to the Future Pensions Act, and considering forms of compensation for groups of participants who suffer disadvantage from the system change. It is important for the works council to be advised at an early stage by experts in pensions law, such as the pension law lawyers of GMW lawyers.
Please feel free to contact us if you have any questions.
GMW lawyers will be happy to assist you with all your employee participation matters. Our lawyers represent both employers and employees.
Do you have a question? Please feel free to contact us.
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