DCLG calls for early consideration of pensions issues on transfer of services

New guidance has been published by the Department for Communities and Local Government (DLCG) on the pensions implications when services are transferred from a local authority or other scheme employer.

Released on 16 December 2009, the guidance sets out the regulatory position provided for in the Local Government Pension Scheme (Administration) Regulations 2008 about how external providers, such as companies or third sector organisations, can be admitted to Local Government Pension Schemes.

Aimed at local authorities in England and Wales, the guidance also outlines the pension considerations that arise when employees transfer from a local authority to an external provider or contractor.

According to the DCLG, particular attention has been given to letting authorities and their procurement officers, as well as administering authorities. The guidance is also applicable to contractors such as private and third sector companies and organisations, and the employees of all these organisations, together with other interested parties.

The non-statutory guidance makes it clear that pensions issues should not be seen in isolation from any tendering and procurement exercise and signposts the importance of The Best Value Authorities Staff Transfers (Pensions) Direction 2007.

“Failure to give these issues early and full consideration may cause concern and uncertainty for transferring staff and delay the transfer of the service,” the DCLG stated.

Despite the breadth of the guidance on admitted body status provisions, the DCLG has advised that practitioners and any other interested parties take their own legal advice on the application of the regulations to their particular circumstances.

The DCLG has announced the guidance will apply until its next review expected in 2012.

For more information please visit:

http://www.communities.gov.uk/publications/localgovernment/abslocalgovpensions