7  Exit Provisions8

7.1  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]9 that on:

  7.1.1  the expiry or termination of this Agreement; or

  7.1.2  the expiry or termination of any sub-contract in the case of a relevant sub-contractor; or

  7.1.3  the employment of any [Eligible Employee] transferring to a New Employer in accordance with clause 30.12 of this Agreement (or otherwise),

the Contractor shall (and shall procure that each relevant sub-contractor shall) procure that the trustees of the Contractor's Scheme offer bulk transfer terms in respect of the relevant [Eligible Employees'] service in the Contractor's Scheme to the pension scheme of the Authority, any Future Service Provider (or their sub-contractors), any new sub-contractor or any New Employer (as applicable) which are no less favourable (in the opinion of the Administering Authority's Actuary or an actuary appointed by the Authority) than the bulk transfer terms set out in the Actuary's Letter.  In addition to this, the Contractor shall procure that the new Employer complies with the requirements of paragraph 4.1.

7.2  If the transfer payment paid by the trustees of the Contractor's Scheme is less (in the opinion of the Administering Authority's Actuary or an actuary appointed by the Authority) than the transfer payment which would have been paid had paragraph 7.1 of this Schedule been complied with, the Contractor shall (and/or shall procure that each relevant sub-contractor shall) pay to the Authority, any Future Service Provider (or their sub-contractor), any new sub-contractor or any New Employer (as appropriate) (or as such person shall direct) the amount of the difference.10

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8 The exit provisions aim to reflect as far as possible the exit requirements of HM Treasury Guidance 'A Fair Deal for Staff Pensions: Procurement of Bulk Transfer Agreements and Related Issues'. The Authority should consult with its professional advisers regarding these provisions and the Guidance and the requirements it wishes to impose.

9  The Authority will need to consider whether, in light of the HM Treasury Guidance 'A Fair Deal for Staff Pensions : Procurement of Bulk Transfer Agreements and Related Issues',  it wants the exit provisions to cover the Transferring Members, the Eligible Employees or wider still the Returning Employees who are members of the Contractor's Scheme.

10  HM Treasury have indicated that the exit provisions in HM Treasury Guidance 'A Fair Deal for Staff Pensions : Procurement of Bulk Transfer Agreements" may cover not only Transferring Members but also Eligible Employees who did not transfer their benefits from the LGPS under the initial bulk transfer but did join the Contractor's Scheme for future service only. The Authority should consult with its professional advisers regarding the scope of the employees it wishes to protect under this paragraph.