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Public sector outsourcing

Taking on ex-public sector employees usually means taking on their existing pension and redundancy rights. Consequently, employers can end up saddled with unanticipated costs, so before tendering for outsourcing work or making an acquisition involving ex-public sector employees, it is important to understand the risks to your business arising from pension and redundancy rights. 

Punter Southall’s extensive experience of providing pensions advice for public sector outsourcing work 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) and advising clients on obtaining and maintaining ‘Admission Body’ status under various LGPS funds.

The specialist knowledge built up by Punter Southall’s Employer Consulting team 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 the 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;
• minimise any funding deficit by negotiating the best bulk transfer terms at the outset;
• negotiate appropriate protection against unforeseen future pensions costs; and
• manage your ongoing pensions risks during and at the end of each contract period.

Recent examples where Punter Southall has helped companies with public sector outsourcing include:

• Designing a new ‘Broadly Comparable’ section within the existing scheme of a major client and obtaining a ‘Certificate of Broad Comparability’ from the Government Actuary’s Department covering the post-2008 NHS Scheme, and securing a significant bulk transfer enhancement
• Advising a long-standing client on the design for a new section of their existing Broadly Comparable Scheme (which we also set up in 1997, and extended to cover the changes to the PCSPS made in 2002) to be Broadly Comparable to the new nuvos section of the PCSPS
• Devising and implementing a brand new scheme to accept a transfer from the NHS Scheme and obtaining a Certificate of Broad Comparability.  We also negotiated an enhancement to the bulk transfer payment and helped communicate the scheme to members
• Helping a client through the pensions issues caused by the merger of three separate housing associations, where their employees included members of the NHS Scheme, the LGPS and the Social Housing Pension Scheme (SHPS).

For further information contact John Prior by email or on 0118 977 2277.

Register for our Public sector outsourcing event, 'Winning tactics for pricing pensions risks', where experts from Punter Southall’s specialist public sector outsourcing team will share our latest research on local authority outsourcing contracts and explain how you can optimise your approach to pensions on public sector contracts.