TUPE transfer questions - Pension Carve-outs

Gaberdeen

Hello there,

Been reading up on TUPE transfers as later this year myself and my colleagues are expecting to change uniforms to an as-yet unknown company.

We currently receive a 9% matched contribution to our DC pensions (based on full pensionable salary) - I understand that this is at risk if we end up being TUPE'd to one of the tendering companies whom I know only pay 5% for similar roles.

There's some questions I would like cleared up for this;

Some information on the ACAS website (https://www.acas.org.uk/tupe/advice-for-employers-and-employees/transferring-to-your-new-employer) says that if the new company do not wish to contribute 9%, they can offer a minimum of 6% instead - how then does this square with still paying 1% more than existing staff?

The second question is related to total renumeration. If we reasonably assume the 9% matched DC is part of the total of what we are paid, being offered 6% is effectively a 3% cut? (it scales to 2.75% when I run the math but 3% is easier to reference)

Or am I completely wrong about this and we'll be getting 5% like everyone already at that company?

It's equally possible we will end up with another company who also pay 9%, but you will appreciate that I'd like to have all my ducks in a row going into the former scenario.

flaneurs_lobster

Exactly the sort of thing you should be discussing with your Trade Union rep.

MyRealNameToo

Is your pension in the T&Cs of your contract? If so then on day 1 they will be the same because TUPE protects your start date and contract on transfer. That said there are lots of levers they can use to either encourage you to sign a new contract or force you onto a new contract.

Obviously you need to look at the contract as a whole and not at an isolated part, in my experience there are often elements of give and take rather than one being universally better or worse than the other and it can come down to personal preferences if you prefer a X% higher pension or a Y% higher profit share/ bonus etc

For example, with a previous acquisition I worked on, pretty much a merger of equally sized companies, the company took the opportunity to move everyone in the company onto common terms rather than just those transferring in. They didnt force anyone to sign the new contract but they did make it very clear that those transferring in who had typically received a circa 20% discretionary bonus each year would be receiving nothing if they didnt move onto the new terms (under new terms discretionary bonus cap depended on your seniority). Most people signed, knew one guy that didnt and that was because he was sure he would be let go fairly soon and his old contract had a 12 month notice period (he was the 5th employee when the company formed) whereas the new contract would have reduced it to 3 months.

Gaberdeen

Thank you MyRealNameToo

My original contract (2012) stated that I'm eligible to join the Company Group pension fund immediately and at the time it was a 6.5% matched contribution that increased (in 2019) to 9% as a part of the "benefit harmonisation" the company undertook - that's also when we moved to "SMART" pensions, or Sal Sac pension contributions.

The way I've understood the wording around the pension carve-outs, is that if I had an employment contract stipulating payments to a private (i.e SIPP, not company/workplace) pension - my total renumeration includes the pension contribution and is therefore protected by that contract.

That unfortunately is not what any of us appear to have, hence a healthy degree of concern that we might end up on a lower matched contribution.

The above said, I'm hoping there are elements of give and take, like you have mentioned - I believe that we are paid on average between 10-15% less than the other technical staff* at one of the tendering companies, meaning there is scope to either keep things the way they are or uplift our salaries so that any reduction in pension contribution % is accounted for.

*NB lower, because our technical field is very, very niche and as a result, we have never fallen under the auspices of a union where other skilled trades like Elec, Inst, Mech etc enjoy collective bargaining. We've generally been treated fairly/competitively by the very small number of companies who employ people in our field. That number is set to get smaller!