Contractor Scheme (Clause 2.7)

3.19  As required by Section 102 of the LGA 2003, all employees transferring from the Authority or employees who originally transferred from the Authority but are now with a Contractor only to be transferred again, should have access to a broadly comparable, same as or better pension provision. The comparison is made against the pension provision they had when transferring from the Authority or on a re-tender, against the pension provision before the subsequent change of employer.

3.20  Clause 2.7 requires the Contractor or the Sub-Contractor to nominate to the Authority the occupational pension scheme or schemes which it proposes will be the Contractor Scheme. The Contractor/Sub-Contractor must confirm that the scheme (i) will be set up within 3 months of the transfer of the employees or cessation of ABS and maintained until payment is made in accordance with the bulk transfer provisions; (2) is reasonably acceptable to the Authority; (3) is approved or capable of such approval by HMRC; and (4) is certified as broadly comparable to the LGPS. For the period of time (if any) during which the employee has ceased membership of the LGPS but has not yet joined the Contractor Scheme, the Contractor should be obliged to ensure that the death-in-service benefits of the transferring employees are maintained. Such benefits do not automatically transfer under TUPE.

3.21  Clause 2.7.2 requires the Contractor to give assurances that benefits in respect of periods of service after the transfer or cessation of ABS will be broadly comparable to those benefits such employees would have been entitled to had they remained with the LGPS. If the Contractor Scheme is terminated, the Contractor agrees to put into place replacement arrangements which are also broadly comparable.

3.22  The Contractor also agrees to give the employees the opportunity to transfer their past accrued benefits under the LGPS into the Contractor Scheme pursuant to a Bulk Transfer Agreement which will accord with the terms specified in Appendix 2 Part B. The Contractor must ensure that for employees who agree to the transfer, their accrued pension rights will be given benefits which are equal in value and are no less favourable than their accrued benefits under the LGPS.

3.23  The Fair Deal for Staff Pensions: Further Guidance issued in June 2004 requires that bulk transfer terms are agreed at an early stage of the procurement exercise so that bidders can indicate in their bid documentation if any price adjustment is proposed on account of any costs or benefits conferred by their acceptance of those bulk transfer terms. Circular No. 162 (August 2004) issued by the Local Government Pensions Committee said that this Guidance should apply as part of the best value process to demonstrate "best value" has been properly tested with a Contractor in a position to properly price its bid.