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Leaving your pension scheme


The Transfer of Undertakings (Protection of Employment) regulations, or TUPE, may protect the pension benefits that you have built up if your employer closes their pension scheme.

If your employer is taken over, or merges with another company, and you remain in employment, the pension benefits you've already built up in a workplace pension scheme may be protected by the TUPE regulations. The new company employing you doesn't have to offer the same terms and conditions for their new pension scheme, but they do have minimum obligations under automatic enrolment.

Your new employer must offer you one of the below options:

  • Either, a salary - related scheme where benefits meet at least the Reference Scheme Test for contracting out, or,
  • A salary-related scheme where the employer pays a minimum level of contributions of 6% of pensionable salary. Where, you, the member is required to contribute. Your contribution rate should not exceed 6% of pensionable pay. The definition of pensionable pay will be set out in the scheme rules, or,
  • A defined contribution workplace pension scheme or stakeholder pension scheme where your new employer will be expected to match your contributions, up to a maximum of 6% of basic pay each year. The contribution rate is driven by the member and not the employer, or,
  • From 6 April 2014 to fit with the new automatic enrolment requirements, a defined contribution workplace pension scheme or stakeholder pension scheme where your new employer can match contributions paid by your previous employer immediately before the transfer.

If you were a member of a defined contribution scheme, the Department for Work and Pensions (DWP) has amended the TUPE regulations to fit with the new automatic enrolment requirements. This means that  receiving employers must meet the TUPE Pensions Act 2004 requirements by paying contributions that match those paid by the previous employer, in respect of the employee immediately before the transfer. This took effect for any TUPE transfer on or after 6 April 2014.

If you were in a personal pension scheme or a stakeholder pension scheme and your former employer had a contractual obligation to pay a certain level of contribution, this obligation passes to the new employer.

Please note that if you’re already drawing pension benefits from your scheme, these should not be affected by a take-over or merger. You can find out more about TUPE on the Government’s website, by clicking here.

Frequently asked...

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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