LGPS and TUPE

When schools are exploring service changes that may involve the TUPE transfer of staff - such as catering, cleaning, ICT or estates - it is important to understand the implications for employees who are members of the Local Government Pension Scheme (LGPS) or otherwise are entitled to be members. Kent County Council manages the Kent Pension Fund and has a clear and consistent position on the arrangements required when staff transfer to an external contractor.

KCC will not act as a guarantor for an incoming contractor. Although the LGPS Regulations allow employer guarantees in principle, the Council cannot take on the financial liability associated with underwriting the pension obligations of an external company. The responsibility for meeting those obligations must rest with the contractor that is delivering the service.

For this reason, any contractor receiving LGPS‑eligible staff must provide either a pension bond or a company or parent guarantee, and this must be in a form acceptable to the Kent Pension Fund. These protections sit within the wider framework of the LGPS Regulations 2013 and the Best Value Staff Transfers (Pensions) Direction 2007, both of which require that pension liabilities are understood, safeguarded and supported by appropriate financial security.

We recognise that obtaining a bond or company guarantee may be challenging for some organisations, especially smaller providers. However, this requirement is not optional. Pension arrangements and the associated financial security must be considered right at the outset of any discussions involving the potential TUPE transfer of staff who participate in the LGPS. Early planning helps avoid delays, procurement difficulties or situations where a preferred provider is unable to meet the Pension Fund’s requirements.

Schools can minimise risk and uncertainty by ensuring that LGPS considerations are built into early thinking, business planning and market engagement. Identifying at an early stage which roles are LGPS‑eligible, and understanding the Pension Fund’s expectations, will help shape realistic timelines and ensure that any procurement or contractual documentation is compliant.

We strongly encourage schools to contact the Kent Pension Fund – Employer Governance team before progressing any proposal that might involve the transfer of LGPS staff. The team can provide guidance on what type of security may be required in a particular case, timelines for actuarial input and the steps needed to complete an Admission Agreement.

For advice or to discuss a specific situation, please contact kentpensionfundgovernance@kent.gov.uk.