Pensions and TUPE

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 regulations.

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 arrangement).

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 protection?

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 ends.

What does the new employer have to provide?

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 contributions; or
  • 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 pay.

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 applicable).

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