My employer wants to close our pension scheme. Can we stop this?

This depends on the circumstances in which your employer is trying to close the scheme.

It will also depend on both what the law allows and any additional requirements contained in the rules of your scheme.

In general there are few legal barriers if your employer wants to:

• close a scheme to new members, but let existing members carry on making contributions.
• close a scheme to new contributions and new members, but still pay the pension you have built up from your previous contributions. This will have the same effect as leaving the scheme to go to work for another employer.

However it is always worth looking at the scheme rules (though you may need professional help for this) to check whether there are any limitations on the employer's freedom to act in this way.

If your employer wants to not just close an existing pension scheme to new contributions and members but completely wind it up, then you do have important legal protection.

Since 2003 the law requires any solvent employer who wants to wind up a pension scheme to buy out benefits in full. This means that they must make alternative arrangements - such as buying deferred annuities - that will provide you with the same pension that your scheme promises. This is normally very expensive, and has removed any incentive for employers to wind up schemes to rid themselves of past pensions promises.

(If your employer is insolvent then the scheme will be wound up, but the new Pensions Protection Fund will protect scheme members from most of the losses this would once have caused.)

Even if your employer is only looking at future benefits and has no legal problems, it does not mean that you should accept closure of your scheme. Unions have fought succesful campaigns to keep pension schemes open in the past. The new information and consultation procedures may give non-union workplaces a route to raise concerns with managers.

If your employer wants to close down a scheme because it has run into genuine difficulties then there may be an alternative. Some employers have been persuaded by unions through negotiation to change the scheme instead of closing it.

One avenue that may be worth exploring - and is dealt with in other questions in this section - is whether it is possible to keep a salary related scheme but negotiate over contributions and benefits.