Paul Leatherbarrow, Liverpool
The Treasury has launched a consultation on whether public sector workers should be able to keep pension rights equivalent to their unfunded scheme when their posts are transferred to the private sector. Under Fair Deal legislation any private sector employer who buys a business run by the public sector must not only retain the same staff but replicate their public sector pension benefits. Following recommendations by the Public Service Pensions Commission, led by John Hutton, the report said the policy restricted innovation and efficiency in the public sector. Ending Fair Deal would make it possible for more varied independent providers to bid for public services because the pension barrier had been removed,’ said the report. Private sector employers have to pay high levels of contributions and take on large liabilities to achieve similar levels of defined benefit (DB) pension. The consultation suggests this may discourage some smaller independent providers from taking part in the outsourcing process. Effected schemes will be: NHS Pension Scheme Teachers’ Pension Scheme (England and Wales) Police Pension Scheme Firefighters’ Pension Scheme United Kingdom Atomic Energy Authority Pension Schemes Research Councils Pension Schemes According to the consultation paper, reforms will affect public sector workers who have already been transferred under the Fair Deal policy. The information provided is based on our understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.
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