Having a loyal and motivated workforce can be a key element in building a successful business. A properly designed employee benefits package can not only enhance a company’s image as an enlightened employer, but provide an excellent tool to recruit and retain high calibre staff and to incentivise and reward those employees whose role within a business is likely to be crucial to its prosperity.
Pensions have traditionally been seen, and are still seen by many, as the most significant employee benefit apart from salary. However, employee share schemes and other performance-related incentives are increasingly playing an integral part in the remuneration policy of many employers.
With expertise in pensions law, employee share schemes and tax, MacRoberts' Pensions & Employee Benefits Group can assist employers in developing an employee benefits policy, by helping to identify objectives, advising on employee benefits most suited to the needs of the business, creating arrangements specially tailored to meet these needs and helping in communicating the worth of those benefits among employees to ensure their maximum impact.
Of the Pensions and Employee Benefits Group, the 2006-2007 Chambers Guide to the Legal Profession notes the Group's "professional manner, cost-effective service and rapid responses" with Peter Trotter being admired by clients for "utilising his considerable experience to great effect with an excellent awareness of commercial issues" and "his ability to get to the heart of matters".
The 2007-2008 edition notes the Group's clients as being "extremely satisfied" and Peter as being "highly professional, meticulous and good value for money" and impressing clients with his “knowledge and thorough experience” of employee share schemes. It’s also noted that Martyn Shaw "leaves clients very impressed with his clear advice and diligent, detail-orientated style".
The 2009-2010 edition notes that we have "A well-organised and highly capable team" in relation to pensions and that "clients coming to MacRoberts for advice on employee benefits can expect a solid and very comprehensive service, according to market commentators. Working closely with the firm's corporate and tax departments, the team is renowned for the breadth of its knowledge and resources."
Pensions Law
Employers and trustees of private occupational pension schemes and employers participating in and public bodies administering statutory pension schemes face a complex maze of pension, social security, tax and employment legislation, as well as frequent judicial decisions and European developments. In addition to liaising with the HM Revenue & Customs, The Pensions Regulator, the Pension Protection Fund and other regulatory bodies, the areas where we can provide specialist pensions law advice include:
In relation to private pension schemes:
- establishing and documenting pension schemes
- communicating with members (booklets and announcements)
- trustees’ duties and matters arising in the ongoing administration
- contracts with investment managers, custodians and internet service providers
- insurance company pension products (including PHI and death benefit arrangements)
- surpluses and deficits
- modifying pension schemes
- rationalisation, re-organisation and merger of pension schemes
- directors’ pensions
- benefit changes to ease the funding obligations of participating employers
- policies on how to exercise employer discretions
- winding-up of pension schemes
- disputes involving members, TPAS and the Pensions Ombudsman
- pensions aspects of take-overs and mergers
- clearance applications to The Pensions Regulator
- multi-employer withdrawal arrangements, including withdrawal arrangements, approved withdrawal arrangements, regulated apportionment arrangements and scheme apportionment arrangements
- contingent asset arrangements, including ones to reduce PPF Levy
taxation and equal treatment.
In relation to public pension schemes:
- application of the Local Government Pension Scheme Regulations 1997 and Local Government Pension Scheme (Scotland) Regulations 1998 and their replacement and related regulations
- admission in the Local Government Pension Scheme as Transferee Admission Body or Community Admission Body
- obligations of employers under statutory pension schemes
- establishment of broadly comparable schemes to public sector schemes and liaising with Government Actuary's Department for required certification.
MacRoberts Trustees Ltd
MacRoberts Trustees Ltd (MTL) is the vehicle through which the Pensions & Employee Benefits Group provides professional and independent trustee services to registered and unapproved pension schemes, whether they are defined benefit, defined contribution, ongoing, closed to new members, in the process of winding up or operating as paid-up schemes and whether or not they have a solvent employer.
MTL's Directors and staff include solicitors within the Pensions & Employee Benefits Group who are accredited by the Law Society of Scotland as specialist pension lawyers, with years of experience in advising on and acting as trustees of pension schemes.
In our role as legal advisers, MTL Directors and staff provide legal advice on similar issues to those faced by employers and trustees of occupational pension schemes. To provide comprehensive and tailored legal advice, we require to approach matters from both an employer’s angle and a trustee’s angle, weighing up the various legal and commercial issues and competing interests. Consequently, in our MTL role, we have the expert knowledge, technical skill and commercial insight to assess issues both from an employer and a trustee’s perspective, to review, consider and, if necessary, question professional advice and to take a lead role on behalf of trustees in discussions with the employer.
This makes MTL eminently qualified to act as professional trustee and to deal with issues which arise in the ongoing administration of a pension scheme and to find appropriate solutions to problems which arise between employers and trustees.
Whilst recognising our primary responsibility is to act in the best interests of the beneficiaries of the pension scheme, we recognise that employers have a major financial interest in their pension scheme and must make decisions with their shareholders in mind.
In our experience, the high degree of regulation and complexity of pensions law, the risk of financial sanction from regulatory authorities and the potential exposure to negligence/breach of trust claims, makes the task of acting as a pension trustee very daunting. A professional trustee acting alongside lay trustees can inspire confidence and facilitate lay trustees in fulfilling their duties and responsibilities.
In our role as professional trustee we aim to:
- build up a good working relationship with existing trustees and the employer
- provide comfort, direction and assurance to fellow trustees
- demonstrate a high degree of technical skill and expertise
- help ensure trustee decisions can withstand scrutiny
- ask the right questions of professional advisers
- ensure members' interests are safeguarded
- act commercially and sensibly in any negotiations and dialogue with the employer
- facilitate the effective administration of the pension scheme and ease the burden on employers and trustees
Employee Benefit Schemes
Our expertise in this area includes designing employee share schemes and other incentive arrangements, liaising with the relevant regulatory bodies if necessary (including HM Revenue & Customs), creating appropriate corporate structures to allow private companies to implement employee share schemes to the advantage of both the existing shareholders and employees, and marketing schemes among employees via explanatory booklets and announcements. Those schemes and arrangements include:
- Enterprise Management Incentives
- Company Share Option Plans
- Employee Share Ownership Plans
- Savings Related Share Option Schemes
- Share Incentive Plans
- Share Options for selected executives and employees
- Performance-related cash and/or share reward schemes
- Phantom share schemes
- Cash Bonus arrangements
- Schemes designed to deliver shares or cash to employees on a trade sale or listing
- Employee Benefit Trusts.
If properly structured, these types of arrangement can provide tax breaks for the company, its shareholders and the employees in question.
We advise on the employee share scheme aspects of takeovers and mergers and on share scheme issues for companies aiming for a flotation.
We also advise on the use of Employee Benefit Trusts as a market for shares in private companies and as 'warehousing' vehicles for shares, both of which can make employee share schemes more effective. A company can use its present resources and future profits to fund the acquisition of shares in a tax efficient manner, which can be particularly attractive for shareholders of private companies who wish to dispose of some or all of their shares (e.g. in contemplation of retirement or simply to realise some capital) and can provide a viable alternative to a trade sale or flotation.