UK: Back To Basics: Do Employers Have A Duty To Inform Employees About Pension Benefits?

Last Updated: 21 December 2018
Article by Liz Wood

Pension schemes can often appear difficult to understand for many employees; a reflection, perhaps, of a more widespread lack of engagement with financial savings and planning. The question then frequently arises: how far does an employer's duty to inform employees about pension benefits extend?

In the next of our back to basics series, Gowling WLG's Combined Human Resources Solutions (CHRS) team explain the extent of an employer's duties to inform its workforce about the pension benefits they're entitled to.

What does the law say about an employer's duty to inform employees about their pension benefits?

There have been surprisingly few case law decisions in relation to employer duties to inform employees about their pension benefits. Surprising, because it might be easy to assume that there is at least some duty to tell employees about what pension benefits they are entitled to, to ensure they make the most of their benefit entitlement.

But in fact, most decisions have made it clear that there is almost no legal duty on an employer to inform its employees about pension benefits or indeed other financial matters. There is also no implied contractual duty on employers to ensure details of the company pension scheme are given to employees.

This is not to be confused with the employer's duty to tell employees about pensions more generally. There are statutory obligations under the Pensions Act 2008 to provide employees with information about automatic-enrolment, and the workplace pension scheme the employer uses.

However, what we are considering here is whether that employer's duty extends to telling employees about any contractual rights, benefits or entitlements, as well as the potential financial implications of making one particular choice in relation to their pension benefits over another.

Is there any obligation on an employer to inform of pension benefits at all?

Yes, but the courts have found that this duty arises in very fact-specific circumstances. In Scally v Southern Health and Social Services Board [1991], the House of Lords confirmed there is an implied duty on an employer to inform an employee about an employee's contractual rights to pension benefits. But this is a limited duty and will only arise in very specific circumstances where:

  1. the employment contract results from negotiation with a union or other representative body;
  2. the particular contractual term must offer the employee a valuable benefit which is dependent on action being taken by the employee to take advantage of it; and
  3. the employee cannot be expected to be aware of the term unless it is drawn to his/her attention.

In these (and only these) specific circumstances, a contractual duty may be implied into the contract requiring the employer to inform their employees of their right(s).

Has the scope of Scally been extended since the case was decided?

No. The Scally decision was made nearly 30 years ago. And the subsequent case law decisions in this area (there have not been many) have been reluctant to extend the limited duty. The key principles which have since been decided are as follows:

  1. there is no general implied duty on employers to give advice about an employee's pension benefits (Outram v Academy Plastics [2000]);
  2. there is no obligation on an employer to inform an employee if they believe the employee is making a mistake in relation to his/her pension benefits (the University of Nottingham v Eyett [1999]):
  3. there is no general duty to take reasonable care of an employee's economic well-being (Crossley v Faithful and Gould Holdings [2004]).

If Scally hasn't been extended, is there anything else employers have to watch out for?

The appeal court decisions of the past three decades have taken a consistent line on this area. Where more ambiguity arises is in some of the Pensions Ombudsman decisions.

For example, in 2015, two separate Pensions Ombudsman decisions reached different conclusions in relation to a seemingly similar set of facts; the question of whether an employer has a duty to engage with questions of an employee's tax planning.

In Cherry (PO 7096), the Ombudsman found there was a duty on the employer to provide relevant information to employees about the tax implications of their actions (in this case, the tax implications on their benefits following re-employment).

By contrast, and more consistent with the Scally line of cases, in Ramsey (PO 3290) - the Deputy Pensions Ombudsman ruled that an employer was not under a duty to warn a scheme member that the reduction in the annual allowance would make him personally liable for an annual allowance charge.

More recently (July 2018), the Deputy Pensions Ombudsman held that where a member (Mr Y - PO 13540) of the pension scheme was terminally ill, the employer should have given Mr Y the option to bring forward his retirement date, taking into account the unusual circumstances (i.e. Mr Y's very serious illness). This would have meant greater benefits on Mr Y's death than would have otherwise been available, as the scheme provided for more generous benefits on a member's death whilst a pensioner than whilst the member remained in employment.

Whilst the Mr Y and Cherry decisions could suggest that employers are under more of an obligation to provide information about pension benefits than was previously thought, our view is that these decisions are both very fact specific, are not binding (as Ombudsman, rather than appeal court, decisions) and caution should therefore be taken before following them.

If an employer is required to provide an employee with information, does the employer need to ensure the employee receives the information?

No. Case law has made clear that where the duty in Scally arises, it is not an absolute duty. Rather, it's a duty to use reasonable efforts to inform the employees concerned about their rights. This means that the employer is not required to ensure the information is received by each affected employee (Andrews v Kings College NGS Foundation Trust [2014]).

However, the employer must take reasonable care to ensure any information it does provide is accurate, clear and not misleading. So once an employer has decided it is going to help employees in understanding the benefits available to them, it must not be inaccurate (Hagen v ICI Chemicals & Polymers [2002]).

Does the duty in Scally apply to any benefit the employee is entitled to?

No. The duty only applies to contractual benefits. It does not apply to any rights or options the employee does not have a contractual entitlement to (Ibekwe v London General [2003]).

Is there anything else an employer should consider when discussing pension benefits with employees?

Employers should recommend that employees take independent financial advice where relevant, and steer clear of attempting to provide this advice themselves, even if asked to do so.

Even if there is no legal obligation to do so, if employers are considering changing employees' pension benefits, as a matter of good practice, the employer should consider informing the employees of the change in advance, and certain types of pension scheme changes will necessitate a minimum 60 days consultation period. For more information, contact Liz or your usual Gowling WLG pensions contact.

Read the original article on

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
7 Nov 2019, Seminar, Birmingham, UK

Providing content specifically tailored to the needs of GCs and Heads of Legal working in government organisations and their affiliates.

14 Nov 2019, Seminar, London, UK

Providing content specifically tailored to the needs of GCs and Heads of Legal working in government organisations and their affiliates.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions