Outsourcing

Outsourcing

The nature of an outsourcing

Outsourcing involves an organisation (the Customer) entering an agreement under which a third party (the Supplier) takes over responsibility for providing services which are currently provided by the Customer’s workforce. In most outsourcings, some employees of the Customer will transfer to the Supplier.

The Supplier must employ transferring employees on the same terms and conditions as the Customer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), SI 2006/246. However, certain pension rights will not transfer due to a pensions exception (SI 2006/246, reg 10).

Even though certain rights under occupational pension schemes do not pass to the Supplier, the Supplier has a statutory duty to put in place certain minimum pension arrangements for transferring employees who meet specified conditions (PeA 2004, ss 257–258 and SI 2005/649).

For more information, see Practice Notes: Key pension issues in a private sector outsourcing and TUPE—what pension benefits should the transferee provide?

Key pension issues in a private sector outsourcing

The key pension issues that need to be considered in a private sector outsourcing are:

•
what

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Pensions News

Pensions UK survey highlights strong demand for clearer and more accessible pension information

Pensions UK has published findings from a survey of 2,082 respondents conducted by Yonder Consulting in September 2025, highlighting a strong demand among pension savers for clearer and more accessible information about their retirement savings. The results show that email is the most preferred communication channel (62%), followed by websites (44%) and paper statements (37%), with mobile apps and government updates each used by 30% of respondents. While newer channels such as social media, webinars and AI tools are less widely used overall, younger savers show greater interest in these formats. The findings also identify areas of lower confidence among savers, including how much to save for retirement (28%), planning an adequate retirement income (26%), understanding the impact of inflation on future income (25%) and navigating tax rules for contributions or withdrawals (around 20%). In addition, more than three-quarters of respondents (77%) want to view all their pensions in one place, and 61% support the automatic consolidation of multiple pension pots.

Member had ‘Nelsonian’ knowledge of pension overpayment caused by inaccurate benefit statement and failed to make reasonable enquiries (Mrs N, CAS-37350-K2Y4)

Pensions analysis: The Pensions Ombudsman has partly upheld a complaint about a return of pension paid by mistake. Martin Scott of gunnercooke LLP looks at the decision.

SSAS administrator directed to refund all fees and charges due to maladministration (Mr R, CAS-45657-B7R7)

Pensions analysis: The Deputy Pensions Ombudsman has partly upheld a complaint about splitting pension assets and maladministration in a SSAS. Martin Scott of gunnercooke LLP looks at the decision.

Employer acted in accordance with scheme rules and followed proper process in deciding not to grant discretionary pension increase for pre-April 1997 benefits (Mr L, CAS-74325-Z1Q4)

Pensions analysis: The Deputy Pensions Ombudsman has rejected a complaint about an employer’s decision not to grant a discretionary pension increase for pre-April 1997 benefits. Martin Scott of gunnercooke LLP looks at the decision..