The DfE has published a new Local Government Pension Scheme (LGPS) guarantee policy on outsourcing arrangements for academy trusts.
This will come as welcome news for multiple trusts who have found themselves in limbo with public sector pension commitments following service provision changes.
It is common practice for trusts to outsource the provision of essential services such as catering and cleaning to third party contractors in the private sector via competitive tendering processes. As a result of such outsourcing arrangements, staff are transferred between employers through the operation of the Transfer of Undertaking (Protection of Employment) Regulations 2006 (TUPE) which essentially transfers liability for the affected employees from one employer to another. Complications arise when staff who are LGPS members transfer under TUPE to a private sector employer and, in order to preserve LGPS staff pensions, the trust enters into a tripartite agreement with the private sector service provider and the LGPS. Until now, trusts have been in a dilemma due to a rule in the Academy Trust Handbook preventing them from entering into guarantees above delegated limits.
More information from Associate Solicitor Emma Suzuki is available here.
Stone King LLP
