Outsourced employees entitled to rejoin NHS Pension Scheme

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Guidance about how outsourced employees under the old Fair Deal arrangement can be re-admitted to the NHS Pension Scheme (NHSPS) has been issued by the Department of Health.

The key points are set out below:

  • In order to allow the transfer of employees to the NHSPS for future service accrual, relevant contractors must first apply to the Department of Health for a Pension Direction; the granting of the Pension Direction allows the contracting employer to be a participant in the NHSPS. Before granting the Pension Direction, the Department of Health will consider each request from contractors on a case by case basis.
  • The Department of Health will identify from what date the employees of the contractor will participate in the NHSPS. Please note in general, participation in the NHSPS for such employees will not be back-dated as to when such employees were originally outsourced from the public sector, and they will only be able to join the NHSPS in respect of future service accrual.
  • Only previously contracted-out employees are able to join the NHSPS, subject to the condition that such employees are employed by the contractor as at the proposed date of such employees transferring back to the NHSPS from the contractor’s current comparable pension arrangement.

Relevant employees may have previously accrued pension rights in a broadly comparable pension arrangement, established by the contractor under old Fair Deal. In accordance with new Fair Deal, these employees will have the option to bulk transfer their accrued rights under the contractor’s broadly comparable scheme to the NHSPS, so that they can obtain day-for-day service credits. However, these employees may opt to not bulk transfer their accrued pension rights to the NHSPS. Where this occurs, such past service liabilities will remain with the contractor’s broadly comparable scheme.