Staff will be entitled to pension rights when they are transferred between
private sector employers as a result of pension reforms.
The proposals mean private sector companies will have to provide new staff,
taken on under the Transfer of Undertakings (Protection of Employment) (TUPE)
rules, with a stakeholder pension. They will also have to pay contributions of
at least 6 per cent.
The change will bring the private sector more closely in line with the
John McMullen, national head of employment law at law firm Pinsents,
welcomed the new rules announced by pensions minister, Andrew Smith, as part of
his raft of pension reforms.
"It levels the playing field. It reduces the opportunity to use
outsourcing to save costs on the wage bill. Deals will have to be based on
finding efficiencies and best practice," McMullen said.