This month, TPR has also published for consultation revised guidance for trustees on pension scheme winding-up. The guidance outlines suggestions of “good practice” to enable at least the key activities of a final salary (DB) scheme, a money purchase (DC) scheme or hybrid schemes to be completed as soon as reasonably practicable and certainly within two years.
The key activities for DB schemes are:
- dealing with debt on the employer;
- securing pensioner benefits;
- identifying the non-pensioner individuals’ remaining share of assets and obtaining terms from an insurer to secure a guaranteed pension;
- conducting a final actuarial valuation; and
- issuing option letters to non-pensioners or details of insured benefits, as appropriate.
The key activities for DC schemes are:
- receipt or recovery of all member/employer contributions due;
- establishing that all pensioner members have annuity policies set up in their own names providing the correct scheme benefits;
- production and sign off of final accounts accounting for and reconciling all assets and cash held in trustee bank accounts and investment manager accounts; and
- establishing that all other beneficiaries have been identified, fund values determined abd statements issued.
The most significant change is the removal of all reference to GMP equalisation, following Angela Eagle’s statement that the Government intends to introduce amending legislation regarding GMP equalisation (see above). No explanation has been given by TPR for the removal of the current guidance on this issue. There is no indication of when any amending legislation may be published, and this is likely to be an area of confusion for trustees the new law is clarified.
The consultation period ends on 5 May 2010.
View the consultation document. (pdf 840.07KB)