Changes to ease the burden of some pension obligations on asset transfers
On an asset transfer, employees automatically transfer with their business under the TUPE regulations, which require the new employer to provide certain levels of pension benefits, depending on the pension provided by the transferring employer. In particular, if the transferring employer provided an occupational pension scheme, the new employer must provide contributions matching employees’ contributions up to six per cent of basic salary, whatever was provided by the transferring employer. This can lead to the new employer being required to pay pension contributions for transferring employees that are far in excess of what the transferring employer had been obliged to pay for the same employees. This has raised particular concerns as automatic enrolment has rolled out…
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