Commentary on Sections Pension protection on transfer of employment Section 258: Form of protection
941.This section specifies the pension provision that transferee employers must make for employees where the conditions in section 257 apply;
942.Subsection (1) makes it a condition of the employee’s employment contract with the transferee that the transferee complies with either the requirement in subsection (2) or the requirement in subsection (3).
943.The requirements in subsection (2) are:
	that the transferee secures that the employee is, or is eligible to be, a member of an occupational pension scheme in relation to which the transferee is the employer;
	where the scheme is a money-purchase occupational pension scheme, that the transferee is, or would be, required to make relevant contributions to the scheme in respect of the employee; and
	where the scheme is not a money-purchase scheme, that it must satisfy either the statutory standard in section 12A of the Pension Schemes Act 1993 (the Reference Scheme Test) or an alternative requirement to be prescribed in regulations.
944.The requirement in subsection (3) is that the transferee makes relevant contributions to a stakeholder pension scheme of which the employee is a member.
945.Subsections (4) and (5) allow the requirement in subsection (3) to be treated as complied with so long as the transferee employer has offered membership of a stakeholder pension scheme to the employee with the promise that the transferee will make relevant contributions from the time the employee becomes a member of that scheme.
946.Subsection (6) allows for variation by agreement between the transferee employer and the employee of the contractual term which imposes the requirement.
947.Subsection (7) leaves “Relevant contributions” to be defined in regulations.