The government has today launched a public consultation on the Fair Deal policy. Fair Deal is a non-statutory policy applying to pension provision for public sector staff when they are compulsorily transferred to a non-public sector employer. It requires that the new employer provides a broadly comparable pension scheme for the transferred staff and bulk transfer arrangements for those staff who wish to transfer their public service pension benefits.
This consultation takes forward a commitment made in Spending Review 2010 and follows a recommendation of the Independent Public Service Pensions Commission’s (IPSPC) interim report, led by former Secretary of State for Work and Pensions, Lord Hutton of Furness.
The consultation document outlines the objectives for future policy:
delivering value for money for the taxpayer
providing an appropriate level of protection to public sector employees
removing barriers to the plurality of public service provision
allocating the costs and risks of pension provision appropriately
The consultation document sets out the range of possible options for future policy in the context of these objectives and invites responses from groups affected. The consultation will close on 15 June 2011.
Notes for editors
The Fair Deal policy applies where a public service is outsourced to be delivered by an independent provider, including private sector businesses and non-profit making organisations, such as charitable bodies and social enterprises.
The IPSPC interim report set out their findings on the Fair Deal policy and concluded “that current pension structures, combined with the requirement to provide comparable pensions (Fair Deal), are a barrier to non-public service providers, potentially making it more difficult to achieve efficiencies and innovation in public service delivery”. The Commission also stated that “ultimately, it is for the government to consider carefully the best way of moving forward with Fair Deal in a way that delivers its wider objective of encouraging a broader range of public service providers, while remaining consistent with good employment practices” - that is why the government is launching this consultation.
The Transfer of Undertakings (Protection of Employment) Regulations, known as TUPE, preserve the employment contracts of employees when they are compulsorily transferred to a new employer and provides for minimum levels of pension protection. This consultation does not cover TUPE.