Compensating for Pensions Losses

Key Points

  • Calculating pension loss can be complex, especially where the employee was in a defined benefit pension scheme.
  • The Employment Tribunal service published a 2003 guidance note which suggested two methods for approximating pension loss without the need for actuarial advice, but this guidance has now been withdrawn.

  • During April and May 2016, the President of the Employment Tribunals (England and Wales) consulted on a new approach to calculating pension loss.

  • In August 2017, the ET presidents published new principles on pension loss compensation in tribunals, together with associated presidential guidance.

  • In higher value cases, the parties may wish to take actuarial advice on pension loss.

  • In the context of a negotiated exit, there are several ways to compensate for pension loss. The cooperation of the pension scheme administrators or trustees may be required to implement some of these. 

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