Dear TPAS
I am hoping you can settle something for me. I've read something
on your website about pensions and TUPE and I have been trying to
convince my boss that he must pay into my stakeholder.
I should first tell you that me and 15 others here were transferred
under TUPE last November. We were members of the company's final
salary scheme and most of us had built up over 20 years
service.
We know we can't carry on paying into the old company's pension
scheme and that the new company doesn't have to set up a final
salary scheme for us. However, your site says our new boss must pay
at least 6% into the stakeholder scheme he's set up for us
all.
If you confirm this in writing, I can hopefully convince my boss
what he must do.
Answer
New rules giving protection to those transferred under TUPE came
into force on 6 April 2005. As your employment was transferred
after that date, your new employer needs to review the new
rules.
The protection applies:
1. to employees who were active members of the old employer's
scheme at the date of transfer;
2. to employees who would have become eligible to join the old
employer's scheme; or
3. for money purchase schemes, where there was a requirement for
employer contributions to be paid.
If the above conditions are met, the new employer must do one of
the following for the qualifying transferring employees:
1. ensure they can join a final salary scheme where benefits are
at least equal to the reference test for contracting out
purposes;
2. ensure they can join a money purchase scheme to which the
employer matches employee contributions up to 6% of basic pay;
or
3. make contributions to a stakeholder scheme, again matching
employee contributions up to 6% of basic pay.
You should note the final point above. If the new employer has
set up a stakeholder and you are eligible for the TUPE protection,
he is only obliged to contribute if you do. If you are not prepared
to contribute, he will obviously not have to.
If you believe you are eligible for the above protection, please
contact your employer. He may wish to contact the Pensions
Regulator for confirmation of his new duty.
You can call our helpline on 0845 601 2923 if you would like to discuss any of the issues related here.
