Guidance

Staff Transfers

This information and available guidance is to help employers of public service pension scheme members who are being transferred within public sector roles.

From:
Government Actuary's Department
Published
26 November 2024

The Government Actuary’s Department (GAD) has extensive expertise advising on the treatment of pensions in staff transfers to, from and within the public sector. This is where staff are generally protected under government policy or other public service pensions regulations. This version was last updated in November 2024.

The information on this page may also be of use to the pension scheme members who are involved in transfers.

These protections are to make up for the fact that the Transfer of Undertakings (Protection of Employment) – TUPE – regulations provide limited protections for occupational pension rights. TUPE is designed to protect employees being transferred between employers. More details of the main government policies can be found in the policy documents at the end of this page.

If your organisation has an upcoming staff transfer, please contact us at: [email protected].

The main areas of protection relate to:

  • Broad comparability assessments - protecting members’ future pension rights by assessing if the pension benefit package offered by the new employer is at least ‘broadly comparable’ to the pension benefits offered by their old employer.

  • Bulk transfer options – protecting members’ past pension rights, particularly where they are final salary linked, by offering a transfer option to the member which would maintain a link to their future salary.

We cannot provide legal advice, including advising organisations on what policy requirements apply to you. However, we can work with you to explain our understanding of the requirements placed on you or protections that apply. Contact us at: [email protected].

Please note that we charge for our services but will provide an estimate of our costs when starting work on an exercise. We cannot provide advice to you until we are formally engaged.

An overview of the steps that need to be followed where transferring staff are moving to a public service pension scheme is included in:

Contact details

We have provided contact details below for GAD and other departments in relation to staff transfers. While every effort will be made to keep this list up to date, please let us know by emailing [email protected] with details if you believe our list requires updating.

Civil Service Pensions

NHS Pensions (Department for Health and Social Care, and NHS Business Services Authority)

Broad comparability assessments

This relates to protecting members’ future pension rights. It primarily applies to compulsory transfers of staff within the public sector, but it can also apply in other circumstances.

The requirement is that a new employer should offer a pension benefits package which is at least ‘broadly comparable’ to the pension benefits offered by their old employer.

In addition, members cannot be required to pay a higher contribution rate to their new scheme than to their old scheme as at the date of transfer.

A pension arrangement does not need to offer identical benefits to be broadly comparable. It must offer broadly the same range of benefits, with the same (or greater) overall value. A broad comparability assessment includes both qualitative and quantitative tests.

There are 2 approaches to assessing broad comparability:

  • Individual Assessment – the assessment considers only those members covered by a specific transfer and is only valid for the transfer and staff being assessed.

  • ‘Passport’ - the new employer’s pension scheme is compared with the relevant public service pension scheme, as it applies to a wide range of membership. Subject to any scope restrictions, the ‘passport’ can then be used for any future transfers where broad comparability against the relevant public service scheme is required, during the life of the certificate. This is usually 2 years, though the passport may be withdrawn before expiry if, for example, there have been changes in the benefits of either the public service pension scheme or the new employer’s pension scheme.

GAD withdrew all broad comparability passports in August 2020 in response to the McCloud judgment, on age discrimination and assessments were suspended.

Since restarting broad comparability assessments in 2022, while waiting for individual schemes’ regulations regarding ‘remedy service’ to be laid before Parliament, GAD initially focussed on broad comparability assessments in relation to benefits from 1 April 2022. GAD is now able to carry out broad comparability assessments covering benefits prior to 1 April 2022, as well.

For broad comparability assessments for staff transferring between public service pension schemes, find out more about the main actuarial assumptions currently in use.

GAD’s Security of pension benefits note sets out the differences between public service and private sector schemes.

Bulk transfer options

This relates to protecting members’ past pension rights earned prior to the date of transfer.

Where current or former public service staff are required to move to or from a public service pension scheme as a result of a transfer of employment, staff should be given the option to transfer their accrued pension rights into their new pension scheme.

GAD represents public sector organisations in negotiations regarding the terms under which members’ accrued pension rights will be transferred.

There are 2 aspects to the transfer of pension rights.

  • Negotiation of terms. This involves discussions between GAD and the other pension scheme’s actuary on the basis for calculating the transfer values, and the credits which would be granted to members in the receiving scheme. In some cases, a shortfall payment may be required to be paid usually by the public sector organisation.

  • Calculation of transfer values: Once agreement has been reached, members will normally have a period of 3 months to decide whether to transfer their past service benefits to their new scheme or to leave them in their previous scheme. Once the members have made their decisions and the appropriate data has been collected, the calculation of the bulk transfer amount for those members who have opted to transfer is made and agreed between the two schemes’ actuaries.

Policy documents

The documents below provide context and historical references to guidance notes and government policy which are still relevant to staff transfers.

Fair Deal policy

Cabinet Office statement of practice on staff transfers in the public sector

‘Best value’ Directions

Updates to this page

Published 26 November 2024

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