As reported in our March 2008 Update, the Pensions Regulator (TPR), the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS) published a consultation paper on the regulation of schemes in wind-up and in a PPF assessment period. The consultation period ended on 15 April 2008 and TPR, the PPF and the FAS have issued a joint consultation report (the Report).
The Report reiterates the importance of avoiding delays in wind-up and in a PPF assessment period. TPR, the PPF and the FAS collectively consider such delays to be contrary to the interests of members because they create uncertainty about the level of benefit members will receive and because schemes’ assets may be reduced by costs incurred in drawn-out processes.
The Report states that the majority of respondents to the consultation supported the overall approach contained in the consultation paper namely that:
- For schemes outside the PPF already winding up, at least the key activities should be completed as soon as practicably possible and certainly within two years from publication of the Report;
- For schemes outside the PPF commencing winding up from the publication of the Report, at least the key activities should be completed within a two year period from the date of wind-up;
- For schemes that qualify for FAS, they should be in a position to transfer all residual assets and membership data as soon as possible once legislation is in place and certainly within two years; and
- For schemes in a PPF assessment period, parties should put in place the necessary arrangements to ensure swift passage through assessment, and trustees are expected to have completed all tasks as soon as reasonably practicable within the following twelve months.
Whilst some responses to the consultation provided helpful suggestions, neither TPR, the PPF nor the FAS consider there to be any evidence necessitating any fundamental changes to the approach as outlined above.
View the Report (147KB)(pdf).