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TUPE

The Transfer of Undertakings (Protection of Employment) regulations, or TUPE, may protect the pension benefits that you have built up if you are affected by a business transfer or outsourcing.

If your employer is taken over or merges with another company or your role is outsourced to another employer, and you remain in employment, the pension benefits you've already built up in a workplace pension scheme are protected. Different rules apply to private and public sector transfers as to what your new employer must provide in the future.

How are pension rights affected in the private sector?

The new company employing you doesn't have to offer the same terms and conditions for their new pension scheme. What they must offer depends on your old employer’s pension arrangements:

Old employer     New employer must offer
Defined contribution workplace scheme (includes many automatic enrolment schemes)     Defined benefit scheme which provides a specified level of pension, or Defined contribution scheme where employer contributions match employee contributions up to 6% of basic pay, or Defined contribution scheme (either workplace or stakeholder pension) where employer contributions match the level of contributions the old employer made.
Contractual entitlement to employer contributions to personal or stakeholder pension     Defined contribution scheme where employer contributions match the level of contributions the old employer had to pay.
Defined benefit scheme      Defined benefit scheme which provides a specified level of pension, or Defined contribution scheme (either workplace or stakeholder scheme) where employer contributions match employee contributions up to 6% of basic pay.

In all cases, the new employer must ensure that, whichever pension scheme they offer, it meets the automatic enrolment minimum standards. 

 

How are pension rights affected in the public sector?

What your new employer must offer depends on whether you work for central government departments/under the control of government ministers or you work for a local authority or some other localised public service.

Old employer New employer must offer
Central government, NHS or other agency subject to ‘Fair Deal’/’New Fair Deal terms.  A public sector scheme (in exceptional circumstances, an occupational scheme which is broadly comparable to the public sector scheme may be offered instead).
Local authorities and some other localised bodies. Either a public sector scheme or an occupational scheme that is broadly comparable to the public sector scheme.

 

What if I am already receiving my pension?

If you’re already receiving a pension from your scheme, these should not be affected by a take-over, merger or outsourcing. You can find out more about TUPE on the Government’s website.

 

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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