21 March 2005 - Wicks – changes to provide pension protection in takeovers
Workers whose companies have been taken over will have a right to employer pension contributions thanks to new regulations that will come into force on 6th April as part of the Pensions Act announced Pensions Minister, Malcolm Wicks.
The Act sets out the detail for pension provision and requires new employers to provide transferred employees with a substantial pension contribution. in a business transfer where the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations apply. The Transfer of Employment (Pension Protection) Regulations provide further detail.
Malcolm Wicks said:
“Employees with access to occupational pension provision prior to a TUPE transfer will now have the right to a prescribed level of employer pension provision after the transfer.
“We are determined to ensure that employees have the protection they deserve when it comes to their pension provision and the requirements in the Pensions Act and the supporting Regulations provide that additional security.”
The provision in the Pensions Act 2004 for pension protection requires new employers to provide transferred employees with a pension scheme which meets certain requirements.
The Transfer of Employment (Pension Protection) Regulations provide the detail of the contribution requirements to a DC or stakeholder pension scheme and set out alternative options for a defined benefit occupational pension scheme. These Regulations have been made following comments received on the consultation document which was published on 7th December 2004. The analysis of the response on the comments received has also today been published on the DWP website.
These changes will come into force on 6th April.
Notes for editors
[an error occurred while processing this directive]- The provision in the Pensions Act 2004 requires that where there is a TUPE business transfer and the employee had access to employer contributed occupational pension provision then the new employer must offer these employees a prescribed level of pension provision. Regulations provide the technical detail of alternative requirements for a salary related pension scheme and provide contribution details for a money purchase pension scheme.
- The changes will affect business transfers that occur after the 6th of April 2005 when the Act and the supporting regulations come into operation.
- The Transfer of Employment (Pension Protection) Regulations can be found on the HMSO website at: http://www.hmso.gov.uk/legislation/uk.htm
- The consultation document is on the DWP website at: http://www.dwp.gov.uk/publications/dwp/2004/eppr/eppr_2005.pdf (258KB)
- The response to the consultation document is on the DWP website at: http://www.dwp.gov.uk/publications/dwp/2004/eppr/eppr_final_2005.pdf (144KB)
Press office media enquiries: please contact Stewart Todd
Press office: 020 7238 0643
Textphone: 020 7238 0788
Out of hours: 07659 108 883
Public enquiries: 020 7712 2171