Broad comparability relates to the protection of transferring employees’ future pension rights.
The idea is to make sure that transferring staff are entitled to pensions in respect of future service that are worth as much as they would have had, were they to have remained with their original employer.
For a pension arrangement to be assessed as being “broadly comparable” to a public sector pension scheme, it does not need to offer identical benefits. However, it must offer the same range of benefits, with the same (or greater) overall value.
The principles on which broad comparability is assessed are set out in this document:
These include both tests of financial and qualitative value.
‘Individual assessment’ or ‘Passport’
There are two alternative approaches to certifying broad comparability, namely an ‘individual assessment’ or a ‘passport’.
- Individual assessment – The pension scheme offered by the new employer is compared with the original public sector pension scheme in the context of the actual employees who will transfer as part of a specific contract. Once broad comparability is achieved, the new scheme will be certified as broadly comparable, but only for this specific transfer.
- Passport – The pension scheme offered by the new employer is compared with a public sector pension scheme, as it applies to a wide range of membership. Once broad comparability is achieved, the new scheme will be certified as broadly comparable for any transfer of members from that public service scheme. The passport is periodically reviewed, but will essentially remain in force until there are changes to the public service scheme.
For a limited number of staff, for a single transfer, then it may be easier to achieve broad comparability by 'individual assessment'. If an organisation intends to bid for many public contracts, then it may be more convenient to establish a scheme which is eligible for a 'passport'.
In practice, bidders for public contracts should be asked by the contracting authority if they have a 'passport' scheme, or if they intend to apply for an 'individual assessment'.
The contracting authority should check the continuing validity of any passport presented to them with GAD, and refer any other bidders to GAD for 'individual assessment'.
Further information
Contact us
To discuss your requirements, please email enquiries@gad.gov.uk, or phone either:
+44 (0)20 7211 2667 or +44 (0)20 7211 2612.
All potential clients of GAD should note that GAD charges fees for the assessment and certification of broad comparability. These fees are discussed and agreed before work commences.
