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GAD – changes to the passport system

Print publication

01/10/2014

The Government Actuary’s Department (GAD) has confirmed substantial changes to its processes for issuing ‘passport’ certificates to firms involved in public sector outsourcing projects.

By way of background, a GAD passport provides that a contractor’s occupational final salary pension arrangements provides benefits which are “broadly comparable” to such pension arrangements that the employee was previously entitled to under the public sector pension arrangement.

The review has taken place following the Government’s introduction of the new Fair Deal in October 2013. As a result, the circumstances in which contractors can now become employers in a public sector scheme to provide pension benefits to its employees has increased, reducing the need and also demand for a GAD passport.

Consequently, GAD has decided to keep its passport system, whilst making a number of changes in order to streamline the process of obtaining a GAD passport, which will ultimately reduce costs for contractors.

Key changes include:

  • moving from a two-tier approach of providing both interim and final passport certificates to just a new single tier GAD passport
  • the single-tier GAD passport shall be valid for up to two years, notwithstanding being voided by the contractor amending its scheme benefits
  • GAD will no longer be reviewing scheme documentation and/or require a legal review of such documentation. Instead, contractors will have to provide an undertaking that scheme documents will be updated accordingly
  • there should be enforceable provisions within the outsourcing contract, reflecting the benefits set out in the GAD passport to ensure employees are receiving the benefits promised by the contractor. This shall be the responsibility of the contracting authority or commissioning body.

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