Early retirement benefits

Unlike pensions, early retirement provisions do transfer. The key case is a European Court test case, brought by UNISON, Beckmann v Dynamco Whicheloe Macfarlane (C-164/00), concerning rights for over-50s. In this case, an NHS scheme entitled redundant employees aged over 50 to an early retirement pension. The ECJ held that early retirement benefits are not “old-age, invalidity or survivors’ benefits” and are therefore not covered by the pensions exclusion, which, it said, must be narrowly interpreted. Instead, these contract terms transferred to the new employer. The case was followed in Martin and others v South Bank University Case C-4/01 [2004] IRLR 74.

In Proctor & Gamble Limited v SCA [2012] EWHC 1257, the Court of Appeal again followed the Beckmann principles, confirming that liability for early retirement benefits transfers to the new owner on a TUPE transfer. This was the situation even if, as in this case, the benefit was discretionary. However, the transferee was only obliged to meet the liability for the benefit until normal retirement age, and not beyond.