Public sector outsourcing

Before tendering for outsourcing work, or making an acquisition involving ex-public sector employees, it is important to understand the potential risks to your business arising from pension and redundancy rights.

Punter Southall’s extensive experience includes overseeing pensions transfers of ex-public sector employees from the Principal Civil Service Pension Scheme (PCSPS), the NHS Pension Scheme (NHS Scheme) and the Local Government Pension Scheme (LGPS). We also advise clients on obtaining and maintaining ‘Admission Body’ status under various LGPS funds.



Our specialist public sector outsourcing knowledge means we carry out due diligence quickly and efficiently, allowing employers to form a view of pension risks at an early stage.

We can help:

  • assess risks associated with transferring pensions and redundancy liabilities
  • model future pension costs and risks
  • decide the impact that pension requirements should have on overall contract price
  • select the most suitable option for meeting the Government’s ‘Fair Deal’ requirements and obtain certification from the Government Actuary’s Department (GAD)
  • minimise any funding deficit by negotiating the best bulk transfer terms
  • negotiate appropriate protection against unforeseen future pensions costs
  • manage your ongoing pension risks during and at the end of each contract period

To hear about recent examples where Punter Southall has helped companies with public sector outsourcing, please contact us.


 Insights and views

    Application of new Fair Deal to existing NHS contracts
    24 October 2014
    The recent release of a policy note by the Department of Health (DoH) means that contract service providers should give serious consideration to returning employees involved on existing contracts to the NHS Pension Scheme (NHSPS).

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    New ‘Fair Deal’ guidance
    23 October 2013

    The long-awaited new Fair Deal guidance has now been issued by HM Treasury. The guidance aims to ensure that staff compulsorily transferred out of the public sector will continue to have access to good quality pensions, by allowing them to remain in the relevant public service pension scheme. Whilst it appears that the position has been simplified for new contracts, there are likely to be complexities for retenders.

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    The new 'Fair Deal'
    14 October 2013

    The long-awaited new Fair Deal guidance has now been issued by HM Treasury, just in time for the seminar that Punter Southall’s specialist Public Sector Outsourcing team will be running in central London on Wednesday 23 October 2013.

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    Public sector outsourcing update February 2012
    7 February 2012
    A valuation of the LGPS in Scotland is carried out every three years, and the results of the valuation as at 31 March 2011 are now starting to emerge. This note considers the likely outcome of the valuation, and the actions that employers with Admission Bodies in one or more of the eleven individual LGPS funds in Scotland (the LGPS Funds) might wish to consider.
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    Public sector outsourcing update January 2012
    23 January 2012
    On 20 December, the Government announced that ‘heads of agreement’ had been established with most unions in relation to the proposed reforms of the local government, health, civil service and teachers’ pension schemes. The main details of the heads of agreement for each scheme were set out in written statements on 20 December. Of more interest to contractors involved in public sector outsourcing are the Government’s comments on the future of the ‘Fair Deal’ guidance and the subsequent note published by the Government Actuary’s Department (GAD) regarding its certification of ‘broadly comparable’ schemes.

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    Public sector outsourcing update August 2011
    8 August 2011
    With public sector budgets under pressure, contractors are increasingly required to consider redundancies from amongst their ex-public sector workforce. The cost of providing the associated redundancy benefits can be very significant, particularly for older employees (typically those over age 55, or in some cases 50) where they may have a right to enhanced pension benefits.

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    Public sector outsourcing update March 2011
    10 March 2011

    On 10 March 2011 the Independent Public Service Pensions Commission, chaired by Lord Hutton of Furness, published a Final Report following its review of public sector pensions. This Final Report, published in time for the 2011 Budget, sets out a number of recommendations to the Government for a revision of the design and governance of public sector pension schemes.

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    Public sector outsourcing update September 2010
    1 September 2010

    Following the Chancellor’s recent announcement that public sector pension increases will be linked to CPI and not RPI from April 2011, GAD has confirmed that, from now on, any proposed broadly comparable scheme will be tested against CPI-linked benefits.

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    Public sector outsourcing update May 2010
    1 May 2010

    Following consultation on the Cabinet Office’s initial proposals for reform of the Civil Service Compensation Scheme, final terms were published on 2 February 2010. This briefing note provides details of the revised benefits payable through the Civil Service Compensation Scheme.

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    Public sector outsourcing update February 2010
    1 February 2010

    A valuation of the LGPS is carried out every three years, with the next one due as at 31 March 2010.This note looks at the possible outcome of that valuation, and the potential impact on Admission Bodies in particular.

    Read more
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    Speak to us

    Speak direct to our specialists in this area
    John Prior
    Or call us on
    020 3327 5000