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Consulting pension scheme members on changes to definition of 'pensionable' salary is on the cards

Employers may be required to consult with pension scheme members if it plans to make changes to their pensions arrangements, according to proposals from the Department for Work and Pensions (DWP).

The new listed change relates to an employer's proposal to "change, in whole or part, the definition of pensionable earnings in the scheme rules, which applies to members or members of a particular description".

The DWP issued a consultation on the amendment, which will close on 18 December 2009.

Emily Forrest, associate at Sacker & Partners, said: "Given the increasing strain on resources, a number of employers are currently looking at what goes into the pensionable salary mix. It will therefore be very interesting to see how this proposal ultimately develops. But clearly this is something that employers who are currently considering their options for re-engineering pensionable salary need to be aware of now."