Managing pensions in commercial outsourcing

We recently undertook a public to private sector transfer for the provision of building maintenance services. Unfortunately our Directors didn't investigate the pension situation and assumed that civil servants could transfer directly to our company scheme. As the civil service makes 19% employer contributions and we make 5%, there's a huge difference. After doing some research, I found that GAD (Government Actuaries Dept) have to assess & approve new pensions schemes in this type of transfer. It's not up to the new incoming employer to decide.

There is also an option to leave new employees in the Civil Service pension and continue with the same level of contributions towards it. This may help overcome difficulties in being unable to offer a similiar scheme.

I hope this is helpful to anyone involved in public to private sector TUPE transfer. You may need to factor in the cost of increased employer pension contributions (if yours are at a lower level) - since it may affect profit levels if not anticipated.