We are a private sector company who regularly TUPEs in employees with a local government or NHS pension which we maintain. There is often a gap of several months between the TUPE in date and our application for a pension direction for the pension scheme and final confirmation being granted. Although benefits are generally backdated to the TUPE transfer date, during this period there is a potential gap in cover, particularly death in service cover.
To date we have been unable to gain clarity from the pension scheme provider as to what would happen in the event of a death in service that occurs during this gap. Who is responsible for paying the death in service benefit... the pension scheme or the employer?
I would be interested to know if anyone has experience of this and can clarify who is responsible for the death in service benefit. If it is the employer, do you add these employees to your life assurance policy on a temporary basis or is there another solution?
I don't have direct experience of this, but the LGPS schemes all operate to the same basic rules and the death-grant element is a feature of the pension scheme. The would therefore be no diret liability on the employer while any application to become an admitted body was pending. Once it is granted, all rights and obligations accrue back retrospectilvey, so any outstanding death-grant responsibility would pass back to the pension scheme at that point? Should the request to become an admitted body be denied (which is presumably vanishingly rare) then the only obligation on the receiving employer is to offer a comparable scheme, which does not have to emulate the former benefits at all, and so there would be no obligation to provide Life Assurance as a feature of the pension at all?