3rd August 2023
As of 31 March 2022, UK occupational pension schemes had assets of over £2.5 trillion. These assets are invested in order to pay pensions to members of schemes when they retire. What is payable to a member depends on what the governing documentation of the member’s scheme provides.
Broadly speaking, employers set up an occupational pension scheme and determine what benefits are to be accrued by members while in work and paid out to members in retirement. Trustees, who are independent of the employer, are appointed to ensure the scheme is administered in accordance with the governing documentation and that members’ interests are protected.
Pensions lawyers advise employers and trustees in relation to any legal issues arising from occupational pension schemes.
What is pensions law?
Most occupational pension schemes in the UK are set up as trusts. As a result, what is known as “trust law”, which applies to all trusts, regardless of whether or not they are pension schemes, forms the foundation of pensions law. This trust law framework is then overlaid by a statutory regime that is specific to occupational pension schemes. In the aftermath of the 1991 death of Robert Maxwell, owner of the Mirror Group, it became apparent he had plundered his companies’ pension schemes. Following this, the UK Government brought in significant pensions-specific legislation, much of it aimed at preventing something like this happening again. Since then, the Government has continued to introduce an abundance of pensions legislation.
What does a pensions lawyer do?
A pensions lawyer’s job is to help employers and trustees navigate the large volume of pensions law in existence, and help to interpret the governing documentation of their pension schemes.
The work we do can be incredibly varied and is often very technical. Our primary work is “advisory” work where we advise trustees and employers on queries they may have around changes they wish to make or issues which have arisen. We also do “contentious” work, i.e. where there is a dispute which may end up with the Pensions Ombudsman and/or the Courts. Finally, “transactional” work, i.e. getting deals done, has become increasingly common in recent years with large transactions being entered into with insurance companies.
Pensions lawyers will also commonly provide support to colleagues in their firm’s corporate practice by carrying out due diligence on companies’ pension arrangements and advising on appropriate warranties to go into share purchase agreements or similar documentation.
Clients will most commonly not be experts in the subject matter – trustees need not have any background in pensions – so a large part of the job is communicating complex information in an understandable way.
The following are a few examples of work I have been involved with:
- Advising on whom lump sum death benefits may be paid out to, including tricky cases where members have had more than one spouse or have been killed and are not named on their child’s birth certificate
- Advising on how to rectify overpayments/underpayments of pensions made to members
- Advising on how to respond to members who have transferred out of the scheme and subsequently lost their money in a scam
- Drafting defences for employers and trustees against claims made by members to the Pensions Ombudsman
- Advising on mergers of pension schemes
- Reviewing investment fund documentation prior to trustees investing in those funds
- Advising on “bulk purchase annuities” and other transactions with insurance companies
- Advising trustees in relation to the insolvency or potential insolvency of their scheme’s sponsoring employer
- Drafting parent company guarantees
- Drafting third party administration agreements (setting out the terms under which professional administrators will administer the scheme).
- Attention to detail
- Problem solving/analytical skills
- Ability to communicate complex information in a concise and understandable way – strong written and verbal communication skills
- Commercial thinking – the ability to apply the law and advise in the context of particular commercial situations
- Team work.
Pensions lawyers are predominantly qualified solicitors. (Some barristers have expertise in pensions, but their work is very different to that set out in this article – they generally act on specific instructions where a matter is going or may go to Court).
The way in which one qualifies as a solicitor has changed very recently but, broadly speaking, under the new regime you are required to have a degree-level qualification in any subject (it does not have to be in law). You are then required to pass both stages of the Solicitors Qualifying Examination (SQE) assessment and complete two years of qualifying work experience. The qualifying work experience is likely to be obtained on a “training contract” which is a two year period spent as a trainee with a law firm. During this period you will rotate through different practice areas in the firm. It is also possible for school leavers to undertake apprenticeships during which they will obtain degree-level qualifications, and undertake the SQE assessment, whilst working for their firm.
Many law firms pay for the course fees of their future trainees/apprentices. Most of these firms accept applications from penultimate year law undergraduates and final year non-law undergraduates, but some firms accept earlier or later applications. It is not necessary to secure a training contract offer before completing the SQE, but doing so provides an obvious and significant financial benefit.
It would be a shock if someone knew they wanted to become a pensions lawyer without having first gained legal work or study experience and establishing they want to enter the legal profession. If what I have described above sounds interesting and you want to pursue a career in law, you could consider identifying firms to apply to which have pensions teams.
This article has been necessarily high level, and there is a significant amount of information on pensions law and on routes into law which can be found online.
About the Author
Liam Kellett is a senior associate in the Pensions practice of Mayer Brown’s London office. He joined Mayer Brown in 2015 as a trainee and, during his training contract, spent six months on secondment to Marsh.
Liam advises trustees and employers on a broad range of issues relating to both defined benefit and defined contribution arrangements.
Liam assisted the trustees of the National Grid Electricity Group of the Electricity Supply Pension Scheme on a fully intermediated longevity swap transaction with Zurich, covering pension liabilities worth more than £2 billion.
Liam studied physics at undergraduate level, before completing the graduate diploma in law and the legal practice course.