Sunday 13 March 2016 9:11 pm

EU referendum: With the referendum on UK membership of the EU set for 23 June 2016, and the potential for a so-called Brexit looms, this is how UK pensions law could be affected

Crystal-ball gazing regarding a potential Brexit is notoriously tricky business and must be caveated with an appropriately large health warning.

How a Brexit might look in reality is currently unclear, as the terms of such a departure are up for negotiation. If the UK opted to remain part of the single market, it is likely that harmonising legislation would have to be adopted as a precondition. A Brexit is not, by requirement, the end of EU legislative influence.

That being said, however, some tentative predictions can be made.

Significant aspects of UK pensions law originate in EU law. The EU has driven pensions legislation notably in areas such as scheme specific funding, transfers of undertakings and anti-discrimination. Over time, these provisions have been implemented into, and consolidated within, national law  – the Pensions Act 2004, the TUPE Regulations 2006 and the Equality Act 2010 respectively.

Any exit from the EU would not affect national legislation, which would remain intact. Repeal would be time-consuming, and it seems unlikely that large-scale repeal or reform of pensions law would be top of any post-Brexit to-do list. Many of the current requirements are designed to protect members, meaning repeal could be politically unpopular.

Subject to exit terms, a Brexit might, however, impact on EU compliance issues currently filed in the "too difficult" category: future EU laws may not be adopted, and uncertainty in relation to EU requirements where the method of implementation is unclear, such as guaranteed minimum pension equalisation, could be removed.

Note also that many pension schemes have incorporated the current legislative requirements into their scheme rules. Post-Brexit, scheme trustees would still be bound by these and, without a pressing reason to undergo the time-consuming and costly process of amendment, change is likely to be gradual and, in some cases, may be impossible, as overriding national pensions legislation would continue to bind trustees and employers, and would not be directly affected by a Brexit. For example, UK legislative protections would continue to safeguard members' accrued benefits from detrimental changes.

Changes might be seen in the UK courts', Pensions Ombudsman's and Pensions Regulator's interpretation of the legislation, none of whom would continue to be bound to consider the ECJ's and EIOPA's interpretation and guidance. However, such differentiation would likely be incremental, at least to begin with.

A potential Brexit, therefore, is likely to usher in a gradual shift rather than a radical about-turn in pensions law. This being the case, trustees, employers and pensions professionals should be well-equipped to respond, much as they have been to the changes in pensions law over the past few decades.