31.1 Project Co shall procure that each Pensionable Board Employee shall be offered membership of a pension scheme for future service operated by Project Co (or the relevant Service Provider), on the Relevant Service Transfer Date, which has been certified by the Government Actuary's Department as broadly comparable to the NHS Pension Scheme assessed following the principles set out in the Statement of Practice issued by the Government Actuary's Department as current at the time.99
31.2 Project Co shall ensure that a certificate from the Government Actuary's Department referred to in Clause 31.1 for each relevant pension scheme shall be delivered to the Board on or before signature of this Agreement and shall provide confirmation that the certificate remains in force three months before each Relevant Service Transfer Date in respect of each Pensionable Board Employee who is to be offered membership of the pension scheme to which the certificate relates.
31.3 The Board shall provide Project Co with such information as it (or its Service Providers) may reasonably require in relation to the NHS Pension Scheme to enable Project Co (or its Service Providers) to submit a proposal to the Government Actuary's Department to assess the comparability of Project Co's (or the relevant Service Provider's) pension scheme. The Board may (at its option) provide such information directly to the Government Actuary's Department. Project Co shall100 (and it shall procure that its Service Providers shall) provide such documentation as is required to enable the Government Actuary's Department to consider the question of comparability including, but not necessarily limited to, the Trust Deed and Rules of any scheme operated by Project Co and its Service Providers, the latest actuarial valuation report, the latest trustees' report and accounts together with a statement giving details of the increases in pensions in payment and deferred pensions in each of the last ten years and details of any area where the trustees will operate discretion to improve benefits.101
31.4 All costs incurred in obtaining a certificate of broad comparability from the Government Actuary's Department shall be borne by Project Co.
31.5 Where the employment of any Pensionable Board Employee is transferred on a second and/or subsequent occasion on a change of Service Provider during the subsistence of this Agreement, Project Co shall procure each Pensionable Board Employee who is a member of, or eligible for membership of, the outgoing Service Provider's pension scheme shall be offered membership of a pension scheme operated by the incoming Service Provider which, as a minimum:
(a) for future service offers the benefits which enabled any preceding Service Provider's pension schemes of which that Pensionable Board Employee was a member (or was eligible to be a member) to be certified as being broadly comparable in accordance with the provisions of Clauses 31.1 to 31.3 inclusive; and
(b) in respect of accrued benefits meets the requirements for bulk transfer agreements contained in Clause 31.6.102
31.6 Project Co shall procure that each relevant pension scheme of which any Pensionable Board Employee becomes a member, whether on initial transfer of their employment from the Board to the Service Provider or on a second or subsequent transfer, shall, on the initial transfer, be able to accept and (subject to one or more Pensionable Board Employees making the necessary election and in consideration of the payment of Transfer Values but otherwise without condition103), shall accept bulk transfers from the NHS Pension Scheme, or, on a second or subsequent transfer104, from any relevant pension scheme of a Service Provider of which that Pensionable Board Employee has become a member, in respect of benefits which that Pensionable Board Employee has accrued in the NHS Pension Scheme or subsequent relevant pension scheme. The assumptions terms which the parties have agreed shall apply with respect to the calculation of Transfer Values from the NHS Pension Scheme (the "Initial Bulk Transfer Terms") are set out in Part 32 of the Schedule (Initial Bulk Transfer Terms Assumptions). In respect of second and subsequent transfers, the terms which shall apply with respect to the calculation of Transfer Values shall be such as shall provide Transfer Values which are not less than the Transfer Values which would result from applying the Initial Bulk Transfer Terms.105
31.7 The Board shall have the right, but not the obligation, on any second or subsequent transfer, to request the Government Actuary's Department to certify, in respect of any relevant pension scheme, that the requirements of Clauses 31.5 and 31.6 have been met. Project Co shall (and it shall procure that its Service Providers shall) provide all such documentation as is required to enable the Government Actuary's Department to make the necessary assessment.
31.8 Notwithstanding the provisions of Clause 30.4 Project Co shall procure that there shall be provided for each Pensionable Board Employee, as far as practicable, on termination of employment on or after the Relevant Service Transfer Date, and on or before the Termination Date, rights which replicate those to which the employee would have been entitled under the NHS Superannuation Scheme (Scotland) Regulations 1995 and the NHS (Compensation for Premature Retirement) (Scotland) Regulations 2003 as amended from time to time had he remained in Board employment or if any such Employee cannot be given in any respect such equivalent rights he shall be provided with compensation which is broadly comparable or of equivalent value to the lost entitlement.
31.9 Project Co shall procure that any persons who may be employed by Project Co or by a Service Provider at any time during the subsistence of this Agreement who are not Pensionable Board Employees but who are nevertheless wholly or substantially engaged in the provision of any of the Services shall be offered membership of the broadly comparable pension scheme operated by Project co (or the relevant Service Provider) pursuant to Clause 31.1 or Clause 31.5, as applicable, on the same basis as the relevant Pensionable Board Employees.106
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99 Boards should ensure that certificates from the Government Actuary's Department in respect of relevant pension schemes are available prior to contract signature and also three months before each relevant Transfer Date.
100 The requirements as to the provision of documentation concerning Project Co or Service Provider's pension scheme are as stated in "Public Private Partnerships in Scotland- Protocol and Guidance concerning Employment Issues.
101 To be confirmed on a project specific basis.
102 In accordance with "Public Private Partnerships in Scotland – Protocol and Guidance concerning Employment Issues NHS Boards must require broadly comparable pension arrangements to be secured on second or subsequent transfers. These should, as a minimum, protect the benefits which enabled the first scheme into which relevant staff transferred to be certified by GAD.
103 As envisaged by HM Treasury guidance ("Fair Deal for Staff Pensions: Procurement of Bulk Transfer Agreements and Related Issues" published June 2004) some bidders may include in their price a risk premium for Bulk Transfers. This will reflect the concern of their actuarial advisors that the Initial Bulk Transfer Terms may not properly reflect the liabilities that the bidder's pension scheme will be required to accept in the event that bulk transfers take place. If this happens, the parties will need to ensure that the agreement records exactly what assumptions have been made and how any perceived risk has been priced. For example, the bidder may have assumed that 40% of those eligible exercise their right to transfer accrued entitlement from the NHS Pension Scheme. If fewer than that actually do transfer, the Board will wish to ensure that any excess risk pricing is removed. Conversely, if greater numbers exercise their right to transfer, the bidder will expect an upwards adjustment. In both cases, the basis on which adjustments are to be calculated should be made clear and the formula for doing this should be specified in Project Co's bid.
104 For example, following a change of service provider as a result of a market testing. Boards will need to take steps to ensure that any costs included in bids received as part of a market testing in respect of bulk transfers are treated appropriately when assessing the value for money of competing bids. On the one hand, there is a need to ensure a level playing field. The incumbent provider will not need to worry about pricing for bulk transfer values. Any competitive advantage that this gives the incumbent should be negated when evaluating the bids. On the other hand, if Boards have reason to believe that others are over-pricing to cover the bulk transfer issues, there is no reason why that should not be taken into account.
105 It is important that these assumptions are agreed as soon as possible as experience suggests there is scope for dispute.
106 Where a Board is satisfied that it is not practicable for Project Co to procure such an arrangement it is permissible to agree that Project Co will procure provision of alternative pensions for new joiners.