27.7.  Service Provider Scheme

Where this clause 27.7 applies pursuant to clause 27.6, the following shall apply:

27.7.1.  The Service Provider 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 Service Provider Scheme" for the purposes of this clause 27.7.  Such pension scheme or schemes must be:

a)  established within three (3) months of the Relevant Transfer Date or Cessation Date (as the case may be) and maintained until any payment to be made under Schedule 20 (Bulk Transfer Terms) is made;

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

c)  approved by HM Revenue & Customs as an exempt approved scheme under Chapter I of Part XIV of the Income and Corporation Taxes Act 1988 (or capable of such approval provided that the payment to be made to the Service Provider Scheme pursuant to Schedule 20 (Bulk Transfer Terms) has been specifically approved by HM Revenue & Customs) or has been registered under section 153 of the Finance Act 2004, as the case may be; and

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 broadly comparable to those provided by the LGPS;41

27.7.2.  The Service Provider 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 Service Provider Scheme with effect from and including the Relevant Transfer Date or Cessation Date (as the case may be);

b)  the Service Provider 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 broadly comparable to the benefits which the Eligible Employees would have been entitled to under the LGPS had they continued in membership of the LGPS;

c)  if the Service Provider Scheme is terminated, a replacement pension scheme shall be provided with immediate effect for those Eligible Employees who are still employed by the Service Provider or relevant sub-contractor. The replacement scheme must comply with this clause 27.7 (Service Provider Scheme) as if it were the Service Provider Scheme;

d)  before the Relevant Transfer Date or Cessation Date (as the case may be) the trustees of the Service Provider Scheme shall undertake by deed to the Authority and to the Administering Authority that they shall comply with the provisions of clauses 27.7.1.a) (a) to 27.7.1.d) (Service Provider Scheme), 27.8.1.a), 27.8.1.b) and 27.8.1.d) (Undertaking from the Service Provider) and Schedule 20 (Bulk Transfer Terms); and

e)  where the Service Provider 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 of death-in-service benefits provided by the LGPS 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.

27.7.3.  Schedule 20 (Bulk Transfer Terms) shall apply in relation to the terms for bulk transfers from the LGPS to the Service Provider Scheme following the Relevant Transfer Date and any subsequent bulk transfers on termination or expiry of this Agreement.  

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41  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 Service Provider'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.  Discretionary enhanced benefits payable under the Compensation Regulations are covered in Clause 31.9.