Local Government Pensions Scheme in England and Wales - Scheme Improvements (Access and Protections)

86. To clarify who will be eligible for the improved Fair Deal pension protections, the draft regulations refer to a group of members with protected rights - protected transferees. Protected transferees would have a right to continued access to the LGPS, even where the contract they are working on is compulsorily transferred under TUPE to a service provider (defined in the draft regulations and from this point on as a relevant contractor).  

87. Protected transferees would retain their protected transferee status and access to the LGPS so long as they remain working ‘wholly or mainly on the outsourced activities which are being carried out by the relevant contractor on the Fair Deal employer’s behalf’. This protection would also apply if the protected transferee is involved in a subsequent compulsory transfer of employment or retender, in line with the Best Value Directions. 

88. To implement this, the draft regulations provide that any active member or person eligible to be an active member of the LGPS working for a Fair Deal employer directly before a TUPE service provision transfer to a relevant contractor, will become a protected transferee. They also provide that protected transferees will retain their protection where they are involved in subsequent TUPE transfers, so long as they remain working ‘wholly or mainly on the activities which are being carried out by the subsequent relevant contractor on the Fair Deal employer’s behalf’. 

89. There could be occasions where Fair Deal employers may wish to provide all staff working on an outsourced contract with the same pension protections, regardless of whether they were involved in an eligible TUPE transfer. This could, for example, be applied to those who join the contract after outsourcing due to staff turnover. The draft regulations allow this, so long as the staff remain working ‘wholly or mainly’ on the activities which are being carried out by a relevant contractor on the Fair Deal employer’s behalf. This would enable the Fair Deal employer to avoid a two-tier workforce on contracts that they have outsourced. 

90. The government plans to work with the Scheme Advisory Board, Local Government Association, and other stakeholders, to develop and publish statutory guidance alongside these regulations that will include further detail on the definition of the term ‘protected transferee’, the responsibilities and requirements for the Fair Deal employer and the relevant contractor, and further detail on the option to allow all staff working on a contract outsourced by a Fair Deal employer to be protected transferees. More information on the guidance that is planned can be found in the “Implementation of New Fair Deal proposals”.