What is TUPE?
TUPE, the Transfer of Undertakings
(Protection of Employment) Regulations 1981 is the legislation
which protects employees when their jobs are transferred to a new
employer after the sale of a business.
Since April 2005, following
legislation in the Pensions Act 2004, employers have to provide a
minimum level of pension to employees transferring under the TUPE
When do the regulations apply?
The regulations only apply when the
previous employer provides employees with membership of an
occupational pension scheme (ie a salary-related or money purchase
They don’t apply where the previous
employer provides membership of other arrangements such as Group
Personal Pension Plans and Stakeholder Pension Schemes.
Which employees have this
Employees transferring under the TUPE
regulations who were members of (or eligible to become members of)
their previous employer’s occupational pension scheme.
If the transferring employee was not
in their previous employer’s pension scheme and was not eligible to
join because they were in a waiting period to join, they are still
entitled to protection but only at the date the waiting period
What does the new employer have to
The new employer must provide them
with access to one of the following:
- A defined benefit scheme (eg final
salary) which satisfies the standard required to contract out of
the State Second Pension; or
- A scheme which provides benefits
based on an employer contribution of at least 6% plus any member
- A money purchase scheme (which could
be a stakeholder scheme) in which the employer agrees to match the
contribution made by the employee up to at least 6% of their basic
The new employer must make pension
provision (including employer contributions) available from the
date of the TUPE transfer (or the end of the waiting period, if
The employee and their new employer
are allowed to reach an agreement with one another to opt out of
these obligations and agree alternative arrangements at any time
after the transfer of employment takes place.
Non-Occupational Pension Schemes
The TUPE regulations do not apply to
members of nonoccupational pension schemes, such as Group Personal
Pensions and Stakeholder Pensions.
However, if the previous employer had
a contractual obligation to pay a certain level of contributions
into a non-occupational pension then that obligation transfers to
the new employer along with the other terms and conditions.
For more information, please contact
Usdaw’s Pensions Section on 0161 224 2804 or send an email to