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Early retirement benefits
[ch 5: pages 66-67]Unlike pensions, early retirement provisions do transfer. This was established in the European Court of Justice decision of Beckmann v Dynamco Whicheloe Macfarlane C-164/00. This test case brought by UNISON concerned rights for over-50s. An NHS scheme provided for redundant employees aged over 50 to receive 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. The case was followed in a later case involving NHS lecturers at an NHS Nursing College:
Staff at Redwood College of Health Studies were entitled to enhanced benefits and compensation on redundancy under their NHS scheme. When they transferred to a new employer, they had to move their pension, but the new scheme did not provide the same benefits when they were later made redundant. The ECJ held that the employees were entitled to the same early retirement benefits as they would have been entitled to under the NHS scheme. It said that only benefits paid when an employee reaches the end of his or her working life can be classified as old-age benefits.
Martin and others v South Bank University Case C-4/01 [2004] IRLR 74
The Beckmann principles were followed again in this 2012 case:
In 2007, P&G sold its Family Care business to SCA. TUPE applied but there was a dispute as to whether the pensions at the manufacturing site transferred to the new owner. The P&G defined benefits scheme included early retirement benefits. The Court of Appeal confirmed, following Beckmann, that the early retirement benefits were not covered by the TUPE exclusion, so liability transferred to the new owner. This was the case even though the benefit was discretionary.
However, the Court ordered that the transferee was only obliged to meet the liability for the enhanced benefit until normal retirement age, and not beyond that date.
Procter & Gamble Limited v SCA [2012] EWHC 1257