Driving resolutions during a complex scheme wind-up

When a £700m defined contribution (DC) pension scheme with over 10,000 members transitioned to a master trust, a number of residual issues remained after the asset transfer. These legacy matters were significant enough to slow down – and potentially derail – the wind-up of the original scheme.

Restoring momentum and control

Although the asset transfer was completed, the wind-up was hindered by:

• Legacy administration issues which delayed the statutory accounts, led to underpayments and overpayments to former members, and prompted member complaints.
• Outstanding balances owed to former associated schemes, preventing final accounts sign-off.
• Limited momentum between trustee meetings, with stakeholders struggling to progress actions.
• Historic reconciliation errors, resulting in misallocated contributions and incorrect benefit payments.
• The growing risk of non-compliance with the two-year wind-up notice period to The Pensions Regulator (TPR).

The trustee was therefore under pressure – managing delays with its former administrator and auditor (who could not sign off the statutory accounts), while also trying to maintain the confidence of TPR and former members.

Our approach: experienced project management and clear governance

We appointed an experienced project manager to take ownership of the end-to-end wind-up process.

We:

• Strengthened the governance structure, with clearer reporting lines and defined, achievable deadlines.
• Set up weekly progress calls with advisers to keep actions moving and to provide visible oversight.
• Took ownership of the more complex issues so that other workstreams did not stall.
• Applied our technical pensions knowledge (including taxation, legislation and wind-up requirements) to develop pragmatic, agreed solutions.
• Facilitated improved communication between the former administrator, auditor and legal advisers so that previously 'parked' workstreams could be unblocked.
• Kept the trustee and sponsor regularly informed so that decisions could be made quickly and on a fully briefed basis.
• Recorded meetings concisely, tracked actions, and followed up between meetings so that nothing was missed.

The outcome: a cost-effective and orderly wind-up

Legacy administration issues were resolved methodically, allowing subsequent steps – including statutory accounting reports and the rectification of overpayments and underpayments – to complete in sequence.

Confidence in the project increased among all stakeholders, which in turn improved adviser coordination and overall cost-effectiveness.

TPR was reassured that progress had resumed, reducing the need for its ongoing oversight.

The scheme wind-up, including all legal formalities and statutory notifications, was completed – followed shortly by the wind-up of the trustee company.

"BW’s project manager coming on board was a breath of fresh air. They were organised, structured and tenacious – especially with the relevant advisers. They got stuff done."

Lessons learned and enhancements for future projects

• Dedicated project management and effective governance are critical in complex – and even straightforward – pension scheme wind-ups.
• Strong collaboration between advisers enables faster resolution of legacy issues.
• More frequent touchpoints than the usual monthly or quarterly trustee meetings help keep actions moving.

To address the trustee and sponsor’s earlier frustrations about slow progress and lack of visibility, the BW team now makes project plans and action logs available online for similar projects. This enables trustees and sponsors to track progress in real time, improving transparency, accountability and trust.

"The wind-up of our DC scheme was a complex and challenging process, made significantly more manageable thanks to the project management and governance support provided by Barnett Waddingham. The team’s calm, structured and tenacious approach brought clarity and momentum to a project which had previously been subject to significant delays. BW’s ability to coordinate advisers, resolve legacy issues and maintain clear communication gave us confidence throughout. I would not hesitate to recommend BW’s project management and governance services to any trustee board facing similar challenges."