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MyCompanyPension.co.uk - Helping members of occupational pension schemes to better understand their benefits.
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:: Blog | March 2009 (10 blogs) | TUPE transfers: pension implications after EAT ruling on pay settlements
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TUPE transfers: pension implications after EAT ruling on pay settlements
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The Heyday case which has resolved that employers can force employees to retire at age 65 has taken most of the pension headlines over the last 24 hours.
However, I thought it would be worth drawing your attention to another case by the name of Alemo-Herron and others v Parkwood Leisure. This case involves a TUPE transfer of staff and contractual obligations about staff pay increases. The Employment Appeal Tribunal recently upheld that previous pay increase agreements must be maintained for future pay rises even after a TUPE transfer has taken place.
The implications obviously run much deeper than just pay increases. Where defined benefit pensions are involved, whether final salary or average salary (e.g. CARE schemes), contractual pay increases may well mean much higher pensions as a result. Where there are money purchase schemes, higher salaries gained because of the ruling will mean potentially higher employer contributions.
With a burgeoning public sector over the last 10 years, any change in government over the next couple of years may see a structured ‘sale’ of some public sector services and more TUPE transfers are highly likely. See:
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Mike Jones, MyCompanyPension.co.uk Ltd, March 6th 2009
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