Home > News > 2003 > June 2003 > Winding-up pension schemes
Winding-up pension schemes
How Barnett Waddingham can help in the often long and difficult job of winding up occupational pension schemes.
Areas of concern
Winding-up a pension scheme is a complex and potentially time-consuming business and, as a result, schemes which are winding-up can be a source of many difficulties and sometimes complaints from scheme members. These are frequently referred to in reports by OPRA, OPAS and the Pensions Ombudsman (and also often find their way into the press). Amongst the reasons for these difficulties are:
- Delays in commencing wind-up. Lack of trustees or lack of awareness by trustees - this delays the process of winding-up as only the trustees have the power to wind-up a scheme (not an insurance company or IFA).
- Delays in progressing the wind-up. Difficult, demanding and complex work - most pension administrators rarely give high priority to wind-ups and find difficulties in resolving situations that don't fit into their usual methods of working.
- Incomplete and inaccurate data. Employers can sometimes be unwilling and/or unable to provide assistance to the trustees - creating difficulties at a time when co-operation is most needed.
- Delays in completing final stages of the wind-up. Interest focused on setting up and transferring members to replacement arrangements rather than dealing with other aspects of the wind-up.
- Non-compliance with Pensions Act 1995. Lack of awareness of the continuing requirements.
The Firm
Barnett Waddingham is an independent partnership of actuaries and consultants with over 250 staff in its six UK offices. We have a reputation for providing a high quality professional service.
Current Position
There are at least 10,000 and possibly over 30,000 schemes currently in wind-up. (OPRA was notified of over 3,000 schemes going into windup in the year up to September 2002 alone.) In addition, there are possibly tens of thousands of schemes in a paid-up state, which should be in wind-up. All of these schemes still have to comply with the requirements of the Pensions Act 1995 - discontinuance and winding-up does not provide any form of exemption. All schemes in wind-up will also need to provide annual reports to OPRA by January 2006. Despite the move towards "simplification" it is possible that the Government's Green Paper will make winding-up even more complicated in the future, especially if there are changes in the order of priorities.
How Barnett Waddingham can help
Barnett Waddingham has many years experience of dealing with schemes in wind-up, working on a wide variety of final salary and money purchase schemes directly for clients and on behalf of insurance companies. In our Cheltenham office we have successfully completed the winding-up of over 100 schemes in the last three years. We adopt a pro-active approach to ensure that winding-up is completed properly and efficiently. The main features of our pro-active service are as follows:
- We have experienced staff, working in a dedicated team.
- Informed decision making - we can set out and explain the responsibilities and requirements of trustees to help them make their decisions.
- A combined administration and actuarial service which can be tailored to fit the needs of individual clients.
- Client control of timescales and costs - instead of an open-ended commitment.
- We can quote fixed fees for all stages of the winding-up process.
- We provide regular work management information tailored to the needs of each client.
- A dedicated telephone helpline can provide clients and members with information concerning the progress on the wind-up of a scheme.
It is common to choose providers on the commencement of a pension scheme so why not on wind-up? Barnett Waddingham would be happy to provide details of our services for comparison with other providers.
Barnett Waddingham Investments Limited
Barnett Waddingham Investments Limited is regulated by the Financial Services Authority and provides high quality, independent financial advice, to both companies and individuals. Barnett Waddingham Investments Limited has experience in dealing with clients involved in wind-up and can help in the following areas:
- advice to members in respect of the transfer of their wind up benefits.
- advice and implementation of alternative pension arrangements.
- specialist advice to senior executives and directors of the company.
The close contact between Barnett Waddingham Investments Limited and its parent Barnett Waddingham means that the lines of communication and provision of information between the trustees and individual members can be structured and co-ordinated to ensure that the decision making process is as efficient as possible.
Barnett Waddingham, June 2003.