How to deal with pension provision for transferring employees in a TUPE situation

Authors: Adrian Martin and Michael Hayles

Summary

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• Identify the transferring employees and the pension arrangements that apply to them prior to the transfer, ie those arrangements in which they actually participate or that they are entitled to join.
• Where pension arrangements are in place, assess whether the scheme is an occupational pension scheme or a personal scheme.
• Identify any pension benefits that may transfer under TUPE, ie so-called "Beckmann" rights.
• Work out the minimum pension arrangements that you are required to provide.
• Consider your auto-enrolment obligations for transferring employees.
• Assess whether any contractual obligations may transfer, eg an obligation to pay a certain contribution into a personal pension plan.
• In public-sector transfers, consider the implications of the Government's Fair Deal guidance and the rules relating to "best value" authorities.
• Design the method(s) by which you will provide the required level of pension provision for transferring employees following the transfer.
• Consider potential consultation obligations under TUPE and pensions law.
• Where possible, try to negotiate adequate protection through warranties and indemnities in any commercial documentation.