UK - Moves to prevent pension costs scuppering public sector outsourcing deals have been unveiled by the Treasury.
The guidelines, which take effect immediately, are designed to make pension arrangements more “open, transparent and predictable”.
Public sector scheme members will see pensions become an “integral part” of private finance initiative (PFI) negotiations, as the Treasury promises them a “fair deal for staff pensions”.
The Treasury said the measures were needed to prevent the cost of bulk transfers causing negotiations to collapse at a late stage – at a cost of hundreds of millions of pounds.
Under the new guidance, bulk transfers will be a top priority in outsourcing negotiations with details to be provided at the “earliest stage” and finalised before staff transfer.
Since June 1999, private sector companies have had to provide a “broadly comparable” pension scheme for outsourced public sector workers.
The Treasury says the new approach puts procurement of the bulk transfer agreement “squarely into the mainstream”.
It added: “For this to succeed, the public sector pension scheme will have to settle and make available its terms much earlier than is currently the custom.
“Those terms will have to represent a reasonable final position rather than a negotiating opening bid.”
The Environment Agency Pension Fund (EAPF) has joined a coalition of 88 investors to demand companies disclose more information on environmental impact.
The cross industry guaranteed minimum pension (GMP) equalisation working group has formed five sub-committees to each work on a key component of the guidance.
KAS Bank has launched an end-to-end cost transparency solution for defined contribution (DC) schemes to assist in the delivery of chair's statements.