Your pension rights in the recession:Transfer of Employment (TUPE)

How the Transfer of Undertakings (Protection of Employment) Regulations affect your pension rights

Occupational Pension Schemes

The TUPE laws only apply to employers who provide employees with membership of occupational pension schemes (i.e. salary-related or money purchase arrangements).

They don't apply to employers who provide membership of other arrangements such as Group Personal Pension Plans and Stakeholder pension schemes.

If an employee is transferred under the TUPE regulations and they were a member (or they were eligible to become a member) of their former employer's occupational pension scheme, then their new employer must provide them with access to one of the following:

A defined benefit scheme (e.g. 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 (including stakeholder schemes) 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 a pension scheme available from the date of the TUPE transfer (or the end of the waiting period, if applicable).

The employee and their new employer can agree 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 rules on pension rights do not apply to members of non-occupational pension schemes, such as Group Personal Pension Plans and Stakeholder pension schemes.

However, if your previous employer had a contractual obligation to pay into a non-occupational pension plan for you at a certain level of contribution, that obligation transfers to your new employer with your other terms and conditions.

To find out more about your employment rights during the recession click here to go to the new Recession Rights section of Usdaw’s website.     

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Last Modified: Friday, 26-Jun-2009 20:57:23 EST
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