Redundancy law - a guide for union reps (November 2019)

Chapter 9

Defined contribution schemes

[ch 9: pages 70-71]

Defined contribution schemes are operated independently of the employer so if the employer goes out of business the pension pot will not be affected. Once the employer is insolvent, future pension contributions may be lost.

There is also a risk that the employer has failed to pass some of the monthly contributions employees have already paid on to the provider before becoming insolvent. If this happens, employees will need to contact the company appointed to manage the insolvency and request compensation. Depending on the circumstances, compensation can be claimed from the National Insurance Fund.

Normally the pension scheme administrator or the Official Receiver will make this claim on the employees’ behalf.


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