LRD guides and handbook July 2021

Law at work 2021 - the trade union guide to employment law

Chapter 12

Early retirement benefits

[ch 12: page 491]

Unlike pensions, early retirement provisions and pension enhancements triggered by dismissal before retirement age, for example, accelerated pension benefits on redundancy, do transfer (unless they relate to ill-health or invalidity). This was confirmed in a landmark case brought by UNISON concerning rights for over-50s:

An NHS scheme entitled redundant employees aged over 50 to an early retirement pension. The ECJ ruled that early retirement benefits are not “old-age, invalidity or survivors’ benefits” and are therefore not covered by the pensions exclusion. Instead, these contract terms transfer to the new employer.

Beckmann v Dynamco Whicheloe Macfarlane [2002] All ER 5

https://www.bailii.org/eu/cases/EUECJ/2002/C16400.html

The Beckmann case was followed in Martin and others v South Bank University Case C-4/01 [2004] IRLR 74. These rulings apply to pensions in both the public and the private sector (Proctor & Gamble Limited v SCA [2012] EWHC 125).

Early retirement benefits triggered by ill-health do not transfer to the new employer under TUPE. This is because “invalidity benefits” are specifically excluded from the transfer by the Acquired Rights Directive.