TPR finalises wind-up guidance
UK - The Pension Regulator (TPR) has issued final guidance to help trustees of occupational pension schemes complete key wind-up activities within two years, supported by three new e-learning modules.
The guidance is designed to help trustees meet government expectations - according to in a joint statement from the Pension Protection Fund (PPF), TPR and the Financial Assistance Scheme (FAS) - to ensure scheme assets are maximised, levy payments are reduced and members receive certainty about the level of benefits they will receive.
Following the end of a six-week consultation on the draft guidance - launched in March - TPR has finalised its suggestions of good practice on issues such as administration, planning scheme wind-up and buying out annuities. (See earlier IPE article: Trustees need help with wind-up deadline)
In addition, TPR revealed it has developed three new modules for its online learning tool the 'Trustee Toolkit', which cover the key elements of the wind-up and PPF assessment period:
As the final guidance is aimed at those with some experience or knowledge of the wind-up process - such as trustees, administrators, insurers and professional advisers - TPR recommends "those with limited knowledge or experience to complete the winding up modules on the Trustee Toolkit first".
The guidance meanwhile confirmed TPR expects schemes already winding-up to complete the key activities "as soon as possible" or within two years, and to avoid unreasonable delays it encourages trustees to "adopt a pragmatic and proportionate approach, where appropriate",
The guidance also outlines TPR's recommendation that trustees should have a "project plan" in place in order to ensure that the two-year time frame can be achieved, and suggested the surrendering of the contracting-out certificate and the reconciliation process of contracted-out liabilities should be "among the first activities undertaken in the wind-up process".
Tony Hobman, chief executive of TPR, claimed the "aligned approach" between PPF, TPR and FAS - as part of the department for work and pensions (DWP) - would "ensure consistency" and "maximise regulatory impact".
He said: "The wind-up guidance, alongside our Trustee toolkit learning modules, provides trustees with the support they will need when preparing for and undertaking a scheme wind-up."
Mike O'Brien, minister for pensions reform, added the guidance would bring "clarity" to trustees and "reassurance" for scheme members as it outlines the best practices their scheme should follow and the benefits members can receive.
In addition, Peter Walker, director of delivery at the PPF, claimed a "two-year target for shepherding schemes through the assessment period is achievable" but said a "major step" would be the publication of its own trustee guidance - currently out for consultation - which is expected to be finalised later in the year.
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