Employee Benefits in TUPE Transfers: Protecting People During Change

How to manage employee benefits smoothly and compliantly when teams transfer under TUPE

When a business transfers employees under TUPE (Transfer of Undertakings Protection of Employment), the focus is often on contracts, payroll, and systems.

But one area that’s just as important - and often overlooked - is employee benefits.

From private medical insurance and group life cover to health cash plans and EAPs, these schemes form a key part of an employee’s overall package.

And under TUPE, you’re required to protect their existing terms and conditions as closely as possible.

This guide explains what employers need to know, common pitfalls to avoid, and how Excellect helps businesses manage TUPE transitions with clarity and confidence.

Understanding TUPE and Benefits

TUPE protects employees’ rights when a business (or part of it) transfers to a new employer.

In simple terms:

Employees should transfer on terms and benefits that are no less favourable than what they had before.

That includes:

• Salary and holiday

• Pension contributions

• Employee benefits such as healthcare, life assurance, and protection cover

However, benefits can get complicated - especially when the old and new businesses use different insurers, schemes, or contribution structures.

That’s where having a specialist benefits partner becomes essential.

Common Challenges During TUPE

Every TUPE situation is different, but some of the most common issues we see include:

1. Different Providers or Schemes

The outgoing business might use one insurer, while the incoming employer has another.

Cover levels, eligibility rules, and renewal dates may not align - leading to gaps or duplication.

2. Legacy or Closed Group Schemes

Older schemes (for example, group life plans linked to defined benefit pensions) may no longer be available for new entrants.

This can create a split workforce, with different benefits for different groups.

3. Incomplete Data and Documentation

Accurate data is essential. Missing employee details or unclear benefit histories can delay setup or lead to compliance risks.

4. Unclear Communication to Employees

If employees aren’t told what’s happening clearly, confusion or worry can spread quickly.

Good communication reduces uncertainty and helps maintain trust during the transition.

How Excellect Supports Businesses Through TUPE

1. Audit and Discovery

We start by reviewing all existing benefits - what’s in place, how they’re structured, and what obligations transfer.

2. Provider Liaison

We work directly with insurers and providers to confirm cover terms, manage group movements, and ensure continuous protection.

3. Designing a Future-Ready Structure

Once the transfer is complete, we help you integrate or harmonise benefits where possible - ensuring cost-efficiency and fairness across the workforce.

4. Communication Support

We can help draft employee updates that explain what’s changing, what’s staying the same, and who to contact with questions.

5. Compliance and Documentation

As an FCA-regulated consultancy, we ensure every change is properly documented and compliant with both TUPE and insurance regulations.

A Practical Example

Imagine a company acquiring a regional division with 40 employees.

The acquired team is covered under a legacy PMI policy with different levels of cover and renewal dates.

Excellect would:

• Review both schemes

• Work with the insurer to align renewal terms

• Ensure no one loses cover during the handover

• Help the employer decide whether to harmonise the benefit over time or maintain separate plans initially

The outcome? A compliant, transparent, and stress-free transition for everyone involved.

When to Involve a Broker

The earlier the better.

Engaging a broker before the transfer date gives you more time to:

• Review existing benefit structures

• Identify risks or costs

• Plan communications

• Avoid post-transfer issues that are harder to fix later

Excellect can support both the transferring and receiving business, ensuring continuity of cover and a smooth process for all parties.

Final Thoughts

TUPE transfers can be complex - but they don’t have to be chaotic.

With the right guidance, you can protect your employees’ benefits, meet your legal obligations, and keep morale strong throughout the transition.

At Excellect, we’ve helped countless organisations manage TUPE transfers successfully - handling the detail, liaising with providers, and ensuring a compliant, people-first process.

If your business is planning a transfer or restructure, speak to Excellect for expert, whole-of-market advice and hands-on support.