Under the PA04, employers with more than 50 employees have a statutory duty to consult “affected employees” before making “listed changes” (for example, increasing member contributions). The duty applies to changes made by an employer or the trustees.
While the trustees of a scheme are not required to carry out the consultation themselves, they should be reasonably satisfied that employers have consulted properly with their employees before agreeing any “listed change”.
“Affected employees” include all active and prospective members of a scheme to whom the “listed change” in question relates.
This obligation is in addition to any other consultation requirements, for example under TUPE or the Information and Consultation Regulations 2004.
Where a person fails, without reasonable excuse, to comply with a requirement to consult, TPR may impose a penalty of up to £5,000 in the case of an individual and £50,000 in any other case.