The Pensions Regulator (the Regulator) has published its final guidance for trustees on how to deal with proposals involving the abandonment of a defined benefit pension scheme. The guidance includes responses to a consultation conducted by the Regulator earlier this year.
The key issues the trustees must understand are the changes to the employer covenant and the potential impact on the pension scheme where the link with an employer of substance is removed. The Regulator has reiterated that in cases where there is an employer of substance, abandonment is unlikely to be in the members’ best interest and it is important to initiate an early discussion of suitable alternatives.
View Norton Rose briefing Pension Regulator's guidance on scheme abandonment (May 2007)