The Government has reviewed the "Fair Deal" policy and, while agreeing to maintain the overall principle, it has decided to change the way it is delivered.
From the consultation document issued, it appears that the Government will make changes to the public sector pension schemes so that employees who are transferred out to the private sector will be allowed to continue to participate in those schemes. This will mean that private sector employers looking to take on former public sector employees via outsourcing will not need to set up their own scheme and therefore will not need to negotiate transfer payments. Currently, only employees in the Local Government Pension Scheme (the LGPS) can remain members following an outsourcing.
It is unclear from the Ministerial Statement how this will work in retendering of existing outsourcing contracts, where employees have already participated in a broadly comparable scheme, and therefore once clarification is provided, outgoing contractors will need to carefully consider their options.
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