3.A.7. Contractor Scheme

Where this paragraph 3.A.7 applies pursuant to paragraph 3.A.6 (Contractor Ceases to be an Admission Body), the following shall apply:

3.A.7.1. The Contractor shall or shall procure that any relevant Sub-Contractor shall not later than the Relevant Transfer Date or the Cessation Date (as the case may be) nominate to the Authority in writing the occupational pension scheme or schemes which it proposes shall be the "Contractor Scheme" for the purposes of this paragraph 3.A.7. Such pension scheme or schemes must be:

(a) established within three (3) Months prior to the Relevant Transfer Date or Cessation Date (as the case may be) and maintained until any payment to be made under Appendix 4 (Bulk Transfer Terms) to this Schedule 20 (Employment and Pensions) is made;

(b) reasonably acceptable to the Authority (such acceptance not to be unreasonably withheld or delayed);

(d) certified by the Government Actuary's Department or an actuary nominated by the Authority in accordance with relevant guidance produced by the Government Actuary's Department as providing benefits which are the same as, broadly comparable to or better than those provided by the LGPS149. [However, in the case of Eligible Employees who are Transferring Original Employees and who are being offered membership of the Contractor Scheme with effect from the Relevant Transfer Date, the Contractor Scheme must be certified as providing benefits which are the same as, broadly comparable to or better than provided under their pension scheme immediately before the Relevant Transfer Date (where this scheme was not the LPGS) ];150

3.A.7.2. The Contractor undertakes to the Authority (for the benefit of the Authority itself and for the Authority as agent and trustee for the benefit of the Eligible Employees) that it shall and shall procure that any relevant Sub-Contractor shall procure that:

(a) the Eligible Employees shall by [three (3)] Months before the Relevant Transfer Date or the Cessation Date (as the case may be) be offered membership of the Contractor Scheme with effect from and including the Relevant Transfer Date or Cessation Date (as the case may be);

(b) the Contractor Scheme shall provide benefits in respect of the Eligible Employees' periods of service on and after the Relevant Transfer Date or Cessation Date (as the case may be) which the Government Actuary's Department or an actuary nominated by the Authority in accordance with relevant guidance produced by the Government Actuary's Department shall certify to be the same as, broadly comparable to or better than the benefits which the Eligible Employees were entitled to under the LGPS at the Relevant Transfer Date or the Cessation Date (as the case may be) [In the case of Eligible Employees who are Transferring Original Employees, the benefits provided from the Relevant Transfer Date must be the same as, broadly comparable to or better than the benefits provided by their pension scheme immediately before the Relevant Transfer Date (where this scheme was not the LPGS)];151

(c) where the Contractor Scheme has not been established at the Relevant Transfer Date or Cessation Date (as the case may be)' the Eligible Employees shall be provided with benefits in respect to death in service which are no less favourable than the death in service benefits provided by the LPGS immediately before the Relevant Transfer Date or Cessation Date (as the case may be). Such benefits will continue to be provided until death in service benefits are provided by the Contractor Scheme;

(d) if the Contractor Scheme is terminated, a replacement pension scheme shall be provided with immediate effect for those Eligible Employees who are still employed by the Contractor or relevant Sub-Contractor. The replacement scheme must comply with this paragraph 3.A.7 (Contractor Scheme) as if it were the Contractor Scheme; and

(e) before the Relevant Transfer Date or Cessation Date (as the case may be) the trustees of the Contractor Scheme shall undertake by deed to the Authority and to the Administering Authority that they shall co-operate with the provisions of paragraphs 3.A.7.1(a) to (d), 3.A.8.1(a), 3.A.8.1(b) and 3.A.8.1(d) and Appendix 4 (Bulk Transfer Terms) to the extent applicable to them.

3.A.7.3. Appendix 4 (Bulk Transfer Terms) shall apply in relation to the terms for bulk transfers from the LGPS to the Contractor's Scheme following the Relevant Transfer Date and any subsequent bulk transfers on termination or expiry of this Agreement.

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149 The Authority should note that certification by GAD does not take account of any benefits which are payable solely as a result of the member being declared redundant, either compulsorily or voluntarily, where those benefits exceed the normal benefits available to an individual who resigns from employment at the same time. Such benefits are payable under regulation 26 of the LGPS Regulations. The Authority may wish to consider whether it wants to include any express provisions about the continuation of such benefits in the Agreement, either through the Contractor's Scheme or by way of compensation. If so, the Authority should consult with its professional advisers about such provisions. Alternatively, the Authority may wish to consider with its advisers whether such benefits pass under TUPE (where TUPE applies) following the decisions in Beckmann v Dynamco Whicheloe Macfarlane [2002] 64 PBLR and Martin v South Bank University [2003] 85 PBLR.

150 Protection provided by paragraph 8 of The Best Value Authorities Staff Transfers (Pensions) Direction 2007 requires the assessment of benefits on a re-let of an existing service contract to be made against the Transferring Original Employees' previous pension scheme (where this is not the LGPS). The Transferring Original Employees may still be LGPS members under an admission agreement.

151 Please see the footnote to Paragraph 3.A.7.1 (d)