In any business sale, the buyer and seller are concerned to be as sure as they can be that rights and obligations will transfer to the buyer under TUPE – and in areas where there is doubt, will usually provide for an indemnity by the seller for any rights not accounted for in the purchase price. Generally, pension schemes fall outside the scope of TUPE, but parts of pension schemes which are not "benefits for old age, invalidity or survivors" do transfer.
In 2007 Procter & Gamble sold part of its business to Svenska Cellulosa Aktiebolaget SCA with employees based at its Manchester manufacturing site transferring to SCA under TUPE. The transferring employees were participating members of the Procter & Gamble pension fund, which allowed for early retirement benefits. There were no indemnities in the sale and purchase agreement, and SCA were very clear that they didn’t want to take on any pension liabilities. After the sale the question arose whether some early retirement benefits under the P&G scheme, which had a normal retirement age of 65 but allowed early retirement from age 55 transferred or not. There was no argument at all that TUPE did not apply – and the High Court therefore had to consider whether these benefits were excluded from TUPE with the standard old age retirement pensions or not.
Following the decisions of the Court of Justice of the European Union in Beckmann v Dynamco Ltd and Martin v South Bank University early retirement benefits are not included in the general pension exclusion and therefore transfer under TUPE.
In Procter & Gamble Company v Svenska Cellulosa Aktiebolaget SCA & Anor  EWHC 1257 (Ch), the High Court followed the European precedents and held that the rights did transfer, because they were not "old age" provisions, but with these limitations:
- – rather than being a right to a pension for life, it would cease at age 65, when the employees would be entitled to take their deferred pension under the P&G scheme, thus preventing the transferring P&G employees getting a windfall double pension at 65; and
- – only enhanced rights connected to dismissal will transfer, as otherwise they would count as "old age" benefits.
The point may seem narrow but it has been a cause of considerable headaches for businesses acquiring employees under TUPE and their advisers, not least because of the significant financial implications. This is the first time that the issue has been clearly determined in the English courts.