7 December 2004 - Pensions to be protected in takeovers – Wicks announces consultation on the transfer of employment (PENSION PROTECTION) regulations 2005
Up until now, people working for companies that are bought out have sometimes found their new employer scraps their pension contributions. New regulations will put this right.
Pensions Minister Malcolm Wicks today announced the publication of a consultation document on the requirements for pension provision where there has been a business transfer to which the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations apply.
The Pensions Act requires new employers to provide transferred employees with a substantial pension contribution. The consultation document issued by the DWP today sets out the alternative requirement that the employer will have to satisfy if he offers a defined benefit occupational pension scheme. It also provides details on the contribution requirements he will have to satisfy if he offers a money purchase occupational or stakeholder pension scheme.
Announcing the requirements, Malcolm Wicks said:
“These regulations provide the final detail of the requirements for employer pension provision which we set out in the Pensions Act 2004. Our proposals, which have been widely welcomed, will ensure that for the first time employees with access to occupational pension provision prior to a business transfer will have a prescribed level of employer pension provision afterwards too.”
The consultation period will run until 21st January 2005. Depending on the response to the consultation, the Government will be seeking to lay the Regulations for implementation on 6 April 2005.
Notes for editors
[an error occurred while processing this directive]- Provision in the Pensions Act requires that where there is a business transfer to which the TUPE Regulations apply and the employee had access to employer contributed occupational pension provision then the transferee (new) employer must offer the transferred employees a prescribed level of pension provision. As discussed during the passage of the Bill, regulations will provide the technical detail of the alternative requirement for a salary related pension scheme and provide contribution details for a money purchase pension scheme.
- The changes will affect business transfers that occur after the Act and the supporting regulations come into operation, planned for April 2005.
- The consultation period will run until 21st January 2005.
- The consultation document is on the DWP website at http://www.dwp.gov.uk/publications/dwp/2004/eppr/eppr_2005.pdf (258KB)
- WP is aiming to make and lay these regulations early in 2005 to come into force alongside the provisions in the Act on 6 April 2005.
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