Pensions and Employee Incentives

How can we help you?

We provide a comprehensive range of legal services for all employee-related matters. Our Employment Law Division is complemented by our team of lawyers who provide specialised advice in the area of Pensions and Employee incentives.

Sound legal advice in relation to the provision of pension and other employee benefits cannot be overstated. Employers will recognise the increasing importance of employee incentives. When correctly structured such schemes operate not only as a means of recruiting, retaining and motivating employees but also as a tax efficient and National Insurance Contributions efficient way to remunerate employees and improve performance. Pensions and employee share schemes today play a central part in the remuneration policy of many employers. Employers must ensure that such incentive schemes, in particular pensions, are rooted in commercial reality.

We provide advice to employers and pension scheme trustees on the complex and constantly developing area of pensions legislation and the raft of related rules and regulations. On 7 July 2010 the European Commission issued a Green Paper towards adequate, sustainable and safe European pension systems.

In addition to pensions advice, we have in depth resources to tackle other employee incentive arrangements including employee share schemes. Evidence demonstrates that employee share ownership has a positive impact on employee productivity and overall corporate performance. Current schemes with tax benefits include Approved Profit Sharing (APS), Save As You Earn Sharesave (SAYE), Company Share Option Plan (CSOP), Enterprise Management Incentive Scheme (EMI) and Share Incentive Plan (SIP). The EMI and SIP schemes have been affected by changes introduced by the Finance Act 2001 and The Employee Share Schemes Act 2002. The latter Act seeks to extend employee ownership by widening tax relief on employee shareholding to a greater range of companies as well as enabling employee shareholders to collectively play a greater role in the management of their shares. When an SIP is properly structured, an employer can claim corporation tax relief and is not liable for employer’s NICs whilst EMI schemes attract very favourable tax treatment.

In addition to the above schemes there are a variety of other share schemes of a more informal nature which are fully taxable including long term incentive plans (LTIPs) and share matching plans.