§ Sir Teddy Taylor
To ask the Chancellor of the Duchy of Lancaster (1) what advice has been provided by the Government Actuary on the viability and comparability of the pension schemes of private contractors seeking to secure contracts in market testing exercises; and if he will make a statement;
(2) what has been the impact on the volume of market testing exercises of the decision to require contractors to offer a pension scheme comparable to Crown employees; and if he will make a statement.
§ Mr. Waldegrave
A number of Departments have sought advice from the Government Actuary's Department on pensions arrangements offered by private sector bidders in market testing exercises. The details of this advice vary from case to case and have not been recorded centrally.
The purpose in seeking such advice is to assess the value of the pensions package, having taken into account any compensating changes in the value of other terms and conditions. This is necessary, because, as my right hon. and learned Friend, the then Solicitor-General, explained in 1990 to the Standing Committee on the Property Services Agency and Crown Suppliers Bill, rights and obligations relating to civil servants' pension benefits, while not protected by the acquired rights directive and the Transfer of Undertakings (Protection of Employment) Regulations 1981, are protected by United Kingdom employment law. In the case of a person transferred under TUPE the transferor and the transferee must so arrange things that the pension rights enjoyed by staff after the transfer are broadly comparable with those enjoyed by staff before. Contractors are therefore asked to provide pensions arrangements of comparable value as otherwise employees 689W must be compensated for any detrimental change, either directly, or through offsetting changes in the value of other terms and conditions, such as pay.
I have no evidence that the advice on pensions arrangements has had any impact on the volume of market testing exercises.