Salary Increase Instead of Pension Contributions – Can an Employer do This?Posted in : First Tuesday Q&A NI on 1 November 2022
Can an employer increase salary instead of making pension contributions - where the employee requests that they do so?
The risk that is run in this situation is whether a salary increase as a result of withdrawal from a pension scheme would be considered inducement under section 54 of the Pensions (No. 2) Act (Northern Ireland) 2008. This states that an employer cannot act with the sole purpose of influencing an employee to give up membership of a pension scheme.
It is the employer’s motivation that is relevant in determining a breach of section 54, for example, if an employee came with the request with no prior communication from their employer, there would be difficulty showing that they
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Back to Q&A's This article is correct at 01/11/2022
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