Think tank

This is a thorny subject influenced not only by the national debate but also by the need to think about the future affordability of final salary schemes paying out defined benefits upon retirement. Final salary schemes, or defined benefits schemes, are seen within the sector by many employees as an important part of their remuneration package. Any housing association thinking about moving away from offering such a scheme to staff should be very careful.

In most RSLs the final salary occupational pension scheme is enshrined in contracts of employment. Changing contracts of employment for existing staff is a complex issue and not taken on lightly. An employer cannot unilaterally change their employees' terms and conditions of service. Even if the contract of employment does not set out exactly which pension scheme is provided for the employee, where a scheme has been provided for some years it could be argued that employees have a contractual right to its continuing by "custom and practice".

A decision to offer the alternative of a defined contributions scheme such as a stakeholder pension could be considered for new staff but, once again, the impact on attracting high-calibre employees in a climate of severe skills shortages in the sector must be a careful consideration. In addition, to do so will see the development over time of what could be perceived as a two-tier workforce.

There is no simple answer, and each RSL must make up its own mind as to what it can afford balanced against the need to attract and retain good staff. A first step must be to get good advice from a qualified pensions adviser and not leave it up to the board and the senior management team to come to a conclusion.
Sandy Staff, HR management consultant at the Conway Staff Partnership

Limit to works charges
I have recently started work in the leasehold section of a large RSL. They own an estate that they acquired from a local authority some time ago. They are about to carry out some major works and I am confused about what we can charge. People in the office have said we can charge the full cost of the works, or that we can charge a maximum of £10,000 or that we can charge a maximum of £5000. What is the position?

As lawyers like to say, it all depends. First of all, you must read a sample of the leases. "Major works" often involve improvements rather than repairs. Not all leases allow you to charge at all for improvements – whether something is an improvement or a repair is not a simple question. Secondly, did your employer acquire this as part of a tenanted stock transfer? If they did there is probably a leaseholder consultation document or letter somewhere. Find a copy (not always easy). They may have made promises to the leaseholders who were there at the time, or to tenants who bought later. That may be where the £5000 or £10,000 has come from. Finally, if the RSL received ERCF grant or certain other kinds of government grant funding, then there is often (depending on when the grant was applied for) a legal requirement that no more than £10,000 is charged to leaseholders over a five-year period for the works for which the grant was intended.
Catherine Hand, Partner at solicitor Jenkins & Hand