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.

In short, if your old employer provided a pension scheme, your new employer must provide some form of pension to eligible employees. It need not be equivalent (and it can be worse) but it must meet a minimum standard. It must:

  • match employee contributions up to a maximum of 6% of salary; or
  • where the old employer paid contributions into a defined pension scheme, the new employer must pay contributions that match or exceed those that were paid by the old employer immediately before the transfer. This is to enable new employers, following a TUPE transfer, to pay the lower level minimum contribution that is currently required under new pensions auto-enrolment rules, but only if this was the level of contribution that was being made by the old employer.

For more information, visit the website of the Pensions Advisory Service, which has a helpline: 0300 123 1047.

Employees who transfer compulsorily from the public sector are entitled to pension protection under a non-statutory policy known as Fair Deal. They must be offered continued access to their existing public service pension scheme, instead of a 'broadly comparable' private 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 guidance is available. The new rules apply 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.

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

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.