Local authorities will be legally bound to protect the pensions of staff transferring to the private sector under new rules. The Staff Transfer Pensions Direction 2007, which comes into force next week, brings ‘greater certainty' by giving statutory force to some of the principles contained in the existing non-statutory Fair Deal Guidance on pensions. Best value authorities in England and police authorities in Wales need to be aware of the requirements of the 2007 Direction when letting or re-letting service contracts after 1 October 2007. Gary Delderfield, pensions partner with Bevan Brittan law firm, told The MJ: ‘If staff are transferred to the private sector, guidance is now in place to say local authorities are legally bound to protect staff pensions. This gives protection to the staff. And it gives employees the right to enforce that protection by re-enforcing the guidance already in place.' He admitted that while there would be greater certainty, there would be some complex issues to deal with because the Fair Deal Guidance would remain in place. Problems could arise, he said, for local authorities and private contractors, particularly when re-letting contracts. ‘In the past, there have been some problems because there has been very little protection for staff pensions and, in some cases, staff saw their pension schemes taken away. ‘The Government introduced the non-statutory guidance after a high-profile case, and has now gone one step further by making this legally binding.' A letter from the Department for Communities and Local Government to local authority chief executives in June said the intention of the direction was to ‘provide pension protection for employees of English best value authorities where the provision of services are contracted out and staff transferred under TUPE'.
