"Ultimately the scheme will wind-up, but it may be some years before that is affordable"
Once a scheme has no more active members, we call it a winding down scheme. The benefits for all members are known, albeit they may be subject to unknown future price inflation, and we don't know how long they will be paid for.
All that matters is managing the scheme to pay and/or secure those benefits. Ultimately the scheme will wind-up, but it may be some years before that is affordable. In the meantime, unless a plan is put in place now, the scheme will gradually become less relevant to the employer in terms of providing a benefit to employees - it will just become a drain on resources.
The key with such schemes is to put a plan in place now, setting out how you will manage the scheme over the period to wind-up (even if that seems a very long way off). This means you think about what to do with the scheme while it is still relevant to the employer, but this also has the following real benefits:
- bringing forward the date of ultimate wind-up, because you can take positive action to bring wind-up closer once you know what you are trying to achieve;
- reduced costs between now and wind-up, because the initial plan becomes the main guiding force for the scheme, and this can be run very efficiently.
Our service is designed for smaller to medium size schemes to provide a good way of managing their scheme at an affordable price, but we believe it works just as well as more expensive options, so there is no reason why larger schemes cannot benefit too.