Winding up a Pension Scheme

Able Governance has decades of experience in winding up all types of occupational pension schemes- both defined benefit (DB) and defined contribution (DC).

This expertise was recognised by the Pensions Regulator when it asked director Nick Boyes to assist in the creation of the acclaimed Trustee Toolkit online training facility dealing with wind up of DC schemes.

The winding up of a pension scheme can result from one of three reasons:

Deliberate

The company decides to wind up the scheme due to the ongoing cost and governance burden.

Or the trustees act to secure members' benefits, either with the consent of the sponsoring employer or by deploying the nuclear option in the event of breakdown of negotiations.

Enforced

If the sponsoring employer enters insolvency the scheme will enter a Pension Protection Fund (PPF) assessment process.

If the scheme is defined contribution (DC), it will not be eligible for the PPF and the trustees will be responsible for securing members' benefits.

Accidental

Corporate restructurings can trigger wind up and, potentially, a debt on the employer (See case study 2).

 

It is the trustees' responsibility to ensure that member benefits are secured in line with the scheme's governing documents and pensions law.

Professional advice is essential to prevent this coming back to bite trustees later on!

If you are thinking of winding up your scheme, or are in the middle of it and think you've bitten off more than you can chew, getting a professional independent trustee in place can ensure that everything is dealt with properly and efficiently. Get in touch and we'd be delighted to see if we can help.