The new Fair Deal: pensions requirements on public sector outsourcing

Public sector workers who are compulsorily transferred to an independent provider of public services will in future be able to retain access to their current public sector pension arrangements, the government has announced. Allen & Overy looks at the new policy and its implications for employers tendering for contracts to provide public services.

The new Fair Deal policy makes sweeping changes, allowing participation by non-public sector employers in some public sector schemes for the first time. It applies to central government departments, agencies, the NHS, maintained schools (including academies) and any other parts of the public sector under the control of government ministers where staff are eligible to be members of a public service pension scheme.

At the moment, participation by private sector employers is generally only possible in the Local Government Pension Scheme (LGPS) (although there are some limited exceptions in the NHS Pension Scheme and the Teachers’ Pension Scheme)…

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