Policy News Journal - 2014-15

A reminder that for TUPE transfers that take effect on or after 31 July 2014, employers in micro-businesses (those with 10 or fewer employees) may now inform and consult directly with employees when there is no recognised union or existing employee representatives.

ACAS has published new guidance on handling TUPE transfers , as well as a useful flowchart .

At the same time the Information Commissioner's Office has issued new Guidance Notes on Disclosure of Information under TUPE

TUPE and pensions: five steps to getting it right

8 October 2014

For an employer that inherits employees under TUPE, getting the pension provision right for the transferring employees can be one of the most complex, and potentially costly, aspects of the transfer.

Thanks to Personnel Today for this report:

Most rights under an occupational pension scheme are excluded from TUPE, so they do not automatically transfer with the employees; however, employers need to be aware of rights that can transfer and of the minimum pension provision they are required to arrange.

We set out five key steps to help transferee employers understand their TUPE and pensions obligations.

1. Investigate the existing pension rights of transferring employees The new employer should attempt to get as full a picture as possible of the pension rights of transferring employees. In practice, this may not always be easy, depending on the circumstances of the transfer. In any event, the transferee should attempt to negotiate protection against the possibility that employees transfer on more generous pension terms than anticipated. 2. Identify whether or not there is an “occupational pension scheme” The general exclusion from the automatic transfer principle under TUPE applies only to benefits under an occupational pension scheme (as defined in the relevant legislation), so the new employer needs to be clear about the type of scheme it is dealing with. If employees are entitled to benefits under a scheme that is not an occupational pension scheme, the new employer may inherit an obligation to make pension contributions at the same level as the previous employer. 3. Check whether or not there are any pension rights that could transfer under TUPE Pension rights that are not related to old age, invalidity or survivors’ benefits will transfer to the new employer under TUPE. These are called “Beckmann rights”, after the European Court of Justice case that decided they were not covered by the general exclusion under TUPE. It is important for the transferee to assess whether or not transferring employees might have these rights because they can give rise to substantial costs and liabilities. 4. Identify whether or not there is a duty to provide a minimum level of pension provision after the TUPE transfer Where transferring employees are members of an occupational pension scheme (or are entitled to join one immediately prior to the transfer), the new employer is obliged to put in place a minimum level of pension provision, as set out in the Transfer of Employment (Pension Protection) Regulations 2005. This could include a defined-contribution occupational pension scheme in which the employer matches employee contributions up to a set level.

CIPP Policy News Journal

08/04/2015, Page 96 of 521

Made with FlippingBook - Online magazine maker