What happens to my pension rights in the event of my employment being transferred to a new owner?

Occupational pension rights are excluded from TUPE protection and do not transfer.

However there is some limited statutory protection, under the Pensions Act 2004 and the Transfer of Employment (Pensions Protection) Regulations 2005.

The effect of TUPE on pensions depends on the type of pension arrangements you had with your old employer and on whether you worked in the public or the private sector.

In the private sector, TUPE does not require the new employer to match the pension you had from your old employer, but what they must offer depends on your old employer’s pension arrangements. You can check the position on the website of the Pensions Advisory Service

Different rules apply in the public sector. In most cases, your employer will be required to offer you either continued membership of your existing public sector scheme or another “broadly comparable” scheme. Again there is information available from the Pensions Advisory Service and also from individual public service unions.

Your rights will depend on whether you are covered by ‘Fair Deal’ or by the Local Government Pension Scheme.

Fair Deal applies to employees transferred compulsorily from central government departments, agencies and the NHS, as well as maintained schools (unless they are covered by other local government arrangements) and academies.

Employees who transfer compulsorily to the private or voluntary sector under Fair Deal . Must be offered continued access to their existing public service pension scheme. Ex-public sector staff whose employment is compulsorily transferred a second time to a new service provider (so called second-generation transfers) are also covered.

Fair Deal protection will be lost if an employee voluntarily moves to a different role with new contract terms.

Your employer must consult in advance over any changes to your pension that are envisaged as a result of the transfer. Where there is a union where you work, any consultation must be with the union.

The Pensions Advisory Service has a helpline: 0300 123 1047. 
 

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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