The Fair Deal policy: Treatment of pensions on compulsory transfer of staff from the public sector
Details of the Fair Deal policy, objectives and a range of options for future policy and subsequent transfers.
The Government announced at Spending Review its intention to consult on the Fair Deal policy in response to a recommendation made in the interim report of the Independent Public Service Pensions Commission. The Commission found that the Fair Deal policy, coupled with current public service pension structures, creates a barrier to the plurality of public service provision.
The Fair Deal policy requires provision of broadly comparable pensions where staff are compulsorily transferred from the public sector to a new non-public sector employer as set out in the documents at the bottom of this page.
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. 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.
ConsultationThe consultation document sets out details of the Fair Deal policy, objectives and a range of options for future policy and subsequent transfers. It seeks views on:
- whether there are other groups not identified who are affected by the consultation
- how the Fair Deal policy operates currently and whether this is relevant to future policy
- whether there are any other objectives that should be considered other than those identified in the consultation
- if there is a case for changing the current Fair Deal policy and if so what pension requirements should be
- proposals for future policy
- what approach should be taken for subsequent transfers of staff when previously transferred public services are re-tendered and for employees returning to the public sector having been transferred out in the past under the Fair Deal policy.
This consultation is aimed at public service unions, independent providers of public services (including private sector businesses and non-profit making organisations such as charitable bodies and social enterprises), representatives of public service pension scheme members, representative bodies for independent providers, academics, commentators on pensions and social policy, those individuals who consider that they may be affected by a review of the Fair Deal policy and any other interested parties.
Consultation response and further questions for consultationThe Treasury received 104 responses to the consultation, from a wide range of stakeholders. The response document summarises the main issues raised by respondents under the eight consultation questions and outlines the Government’s response to these. We are very grateful to those who took the time to respond to this consultation.
The response also contains some further consultation questions which will explore how Fair Deal should apply to those employees that have already been transferred out under the existing Fair Deal policy. It considers how the policy should apply when the contract is subsequently retendered under the new Fair Deal policy. The Government is seeking views on the proposal that contracted out staff returning to the public sector should have access to the reformed public service pension schemes, and that contracted out staff who are retendered should either have access to the reformed public service pension scheme or their employer should provide a scheme which is broadly comparable to the reformed public service pension schemes (except where an employee enjoys the benefit of transitional protection).
We are inviting responses to the further consultation questions between 19 November 2012 and 11 February 2013.
The document also contains draft guidance on the operation of the reformed Fair Deal policy. We would be grateful for views on the content of this document.
This consultation is aimed at public service unions, independent providers of public services (including private sector businesses and non-profit making organisations such as charitable bodies and social enterprises), representatives of public service pension scheme members, representative bodies for independent providers, academics, commentators on pensions and social policy, those individuals who consider that they may be affected by a review of the Fair Deal policy and any other interested parties.
The response to this further consultation was published on 7 October.