By Richard Johnstone in Birmingham | 7 July 2011
Pension transfer rules are holding up the government’s Big Society ambitions, a lawyer told a conference workshop yesterday.
Kirsty Bartlett, a pensions specialist with Squire Sanders Hammonds, said that treatment of pensions when public services are taken over was one factor stopping third-sector organisations from bidding for them.
The government has consulted on whether the Fair Deal policy, which requires ‘broadly comparable pensions’ to be provided when staff are compulsorily transferred from the public sector to a new private or third-sector employer, should be changed.
Lord Hutton’s Independent Public Service Pensions Commission found that this creates a barrier to the government policy of increasing the number of public service providers, including voluntary groups, through the Big Society.
Speaking to delegates, Bartlett added: ‘Sometimes it is [a barrier]. We know some providers in the third sector say that they can’t deal with the high costs and risks of funding these schemes.’
She said that the government consultation, which closed on June 15, had created uncertainty, leaving bidders for contracts ‘in limbo at the moment’. Her call for clarity on the issue was backed by CIPFA.
The chair of the CIPFA pensions panel, Bob Summers, said that the review needed to be brought to a ‘speedy conclusion’.
He told delegates: ‘It is crucial that pension issues are addressed at the earliest possible stage of any organisational change that will result in staff transfers. For this to happen, both public sector employers and any future third-party services providers need to be clear on the policy framework within which they are operating.’
He added: ‘CIPFA has found little evidence to support the assertion that the Fair Deal policy, in isolation, is responsible for the lack of diversity in the outsourcing sector and has cautioned against placing too great an emphasis on [it] as the major barrier to entry to potential new and smaller service providers.’
Pension transfer rules are holding up the government’s Big Society ambitions, a lawyer told a conference workshop yesterday.
Kirsty Bartlett, a pensions specialist with Squire Sanders Hammonds, said that treatment of pensions when public services are taken over was one factor stopping third-sector organisations from bidding for them.
The government has consulted on whether the Fair Deal policy, which requires ‘broadly comparable pensions’ to be provided when staff are compulsorily transferred from the public sector to a new private or third-sector employer, should be changed.
Lord Hutton’s Independent Public Service Pensions Commission found that this creates a barrier to the government policy of increasing the number of public service providers, including voluntary groups, through the Big Society.
Speaking to delegates, Bartlett added: ‘Sometimes it is [a barrier]. We know some providers in the third sector say that they can’t deal with the high costs and risks of funding these schemes.’
She said that the government consultation, which closed on June 15, had created uncertainty, leaving bidders for contracts ‘in limbo at the moment’. Her call for clarity on the issue was backed by CIPFA.
The chair of the CIPFA pensions panel, Bob Summers, said that the review needed to be brought to a ‘speedy conclusion’.
He told delegates: ‘It is crucial that pension issues are addressed at the earliest possible stage of any organisational change that will result in staff transfers. For this to happen, both public sector employers and any future third-party services providers need to be clear on the policy framework within which they are operating.’
He added: ‘CIPFA has found little evidence to support the assertion that the Fair Deal policy, in isolation, is responsible for the lack of diversity in the outsourcing sector and has cautioned against placing too great an emphasis on [it] as the major barrier to entry to potential new and smaller service providers.’
