Transfer of early retirement benefits

Occupational pension rights do not transfer under TUPE so far as they relate to old age, invalidity or survivors benefits. However, following the landmark cases of Beckmann and Martin nearly 10 years ago, early retirement benefits or special rights on, for example, redundancy do transfer.

The case of Proctor & Gamble v SCA has now clarified some of the points left outstanding by Beckmann and Martin:

1. A right to be considered for early retirement will transfer under TUPE.
2. The liability of the transferee is to provide any enhancements to early retirement pensions which transferring employees lose when they transfer but not to fund full early retirement benefits – that liability did not transfer to the transferee as it was met by virtue of the employees being entitled to deferred pensions in the transferor’s pension scheme.
3. The transferee is only obliged to provide those enhancements until normal retirement age; instalments of pensions paid after that point are “old age benefits” and the obligation to pay them does not transfer under TUPE.

This clarity is welcome even if some other points remain unresolved.