TUPE and pensions 





Any provisions relating to “old age, invalidity or survivors’ benefits under an occupational pension scheme” are excluded from TUPE by regulation 10. These terms do not transfer. Instead, there are special rules to cover what happens to pensions on a TUPE transfer, explained below. This pensions exclusion must be interpreted narrowly (Beckmann v Dynamco Whicheloe Macfarlane [2002] All ER 5).





Anyone who is already drawing their pension before a TUPE transfer should be wholly unaffected by the transfer.





Only occupational pension rights are excluded from any transfer by TUPE, not early retirement benefits (see below), personal pension schemes, stakeholder pensions or group personal pension scheme obligations under a contract between the member and the pension provider. For example, a contractual promise by the old employer to contribute a fixed amount into a personal or group pension scheme will transfer and must be honoured by the new employer. 



Even though occupational pensions do not transfer, the employer still owes a statutory duty under TUPE to provide information about pensions before a transfer, and to consult on any planned measures, including any measures the transferee has told the transferor about before the transfer, such as planned changes to pension contribution rates. Failure to consult on pensions can lead to a protective award (see above).



There may also be separate statutory obligations to consult on pension scheme changes, and there is a possible fine by the Pensions Regulator of up to £50,000 for any breach.



The employer also owes implied contractual duties not to act negligently when informing employees about the impact of TUPE on their pensions (see Chapter 3, page 81).