David Gallagher and Eleanor Duhs: Brexit and pensions

Last December’s election seemingly showed a clear mandate to ‘get Brexit done’. As the date draws near, those who have responsibility over pensions within their organisations will need to be aware that Brexit will have a number of effects.

Product regulation for sales in the UK/EU

If an organisation has a traditional salary-related pension scheme, the key issue is to ensure that the scheme trustees fully understand the impact of Brexit on the sponsoring employer’s business.

This includes assessing income and profit forecasts, understanding key risks to the business and monitoring relevant legal developments, such as any requirement to comply with different product regulation for sales in the UK and sales in the EU.


All pension schemes have up to 100 data fields for each member. Therefore, duties to ensure data protection compliance fall on employers, trustees, insurers and other scheme administrators. Currently, personal data is in free flow within the EU. It can be transferred from the UK to anywhere in the EU and returned without additional compliance measures needing to be put in place.

In practice, lots of big pensions service providers do this with clients’ data. For the ‘transition period’, the UK-EU withdrawal agreement provides for the GDPR to carry on in full effect, but after 31 December 2020, the measures needed for compliance will depend on the legal arrangements in place between the EU and UK.

The key question is whether the EU will make an adequacy decision in favour of the UK which comes into force at the end of the transition period, thus enabling the free flow of data from the EU to the UK to continue.

If there is no EU adequacy decision in favour of the UK at that point, then this is likely to create significant compliance headaches for UK businesses. At a minimum, organisations will need to review and probably amend existing service contracts and put in place mechanisms for transfer of data from the EU to the UK. Those contracts will be also be important for seeing who carries the extra cost of any changes.

Planning for 2020 and beyond

Brexit is not the only issue. More employees are working later than age 65, for example, and there are calls for members to be engaged in the investment policy decisions made by their fund managers and scheme trustees, with a focus on green investment choices and climate change risks to investment performance. There is also mounting pressure on the government to relax the pensions saving allowances for high earners. All of these issues will continue to shape the pensions of the future.

David Gallagher (pictured) is head of pensions and Eleonor Duhs is director, privacy and information law, at Fieldfisher