About Us Consumers Advisers Employers Media

You are not logged in.

• Log in
• Register

Employer  >  Trustee Zone  >  OPS Matters  >  It's the final wind-up

It's the final wind-up

Following six weeks of consultation, the Pensions Regulator (TPR) has published its final wind-up approach and guidance. The guidance is intended to help trustees of occupational pension schemes meet Government expectations regarding key wind-up activities being completed within two years.

This is a joint expectation set out by TPR, Pension Protection Fund (PPF), and Financial Assistance Scheme (FAS) forming an aligned approach aimed at speeding up both the wind-up and passing through a PPF assessment period.
It is aimed at those with some experience or knowledge of the wind-up process – trustees, administrators, insurers and professional advisers.

What are the key activities?

The guidance outlines the following as being key wind-up activities –

• serving a debt on the employer
• securing pensioner benefits
• identifying the individual remaining (non-pensioners) share of assets and obtaining terms from an insurer to secure a guaranteed pension
• conducting a final actuarial valuation
• issuing option letters to non-pensioners or defaults of insured benefits, as appropriate

What’s included in the guidance?

TPRs guidance outlines examples of good practice on topics including administration, planning scheme wind-up and guaranteed minimum pension (GMP) equalisation amongst other topics. Key points within the guidance are as follows –

• The Regulator expects that schemes already winding up should complete at least the key activities as soon as possible and within two years, and schemes commencing winding up following publication of this guidance should complete at least the key activities within two years.
• TPR has developed a number of e-learning modules as part of its Trustee toolkit, which cover key elements of the wind-up and PPF assessment period processes. It is recommended that those with limited knowledge or experience completes this before starting the wind-up process.
• To avoid unreasonable delays, TPR encourage trustees to adopt a pragmatic and proportionate approach, where appropriate, whilst working in line with the provisions of the trust deed and rules, their fiduciary duties and any legislative requirements.
• You are encouraged to have a project plan in place in order to ensure that the two-year frame can be achieved.
• It is advised that surrendering the contracting-out certificate and beginning the reconciliation process are among the first activities undertaken in the wind-up process due to the time constraints involved.

What do you need to do?

The guidance is intended to support you and bring clarity to the wind-up process. You will need to ensure that the key activities are completed within two years. Therefore, you should keep on top of the wind-up and try to make sure everything is done as quickly as possible. TPR is more likely to offer support than flex its regulatory muscles, although it could use its super powers if you failed to meet the expected time-scales. Before starting the winding-up process, you should complete the Regulator’s e-learning modules on the Trustee toolkit, if you haven’t already done so.
The PPF are expected to publish a guidance document later this year outlining the principles that they expect trustees, and advisers, to adhere to throughout the assessment process. We will provide a summary when this document is published.

The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice.