Scheme debt – full buy-out on employer insolvency
The Occupational Pension Schemes (Winding Up, Deficiency on Winding Up and Transfer Values) (Amendment) Regulations 2005 were laid on 25 January 2005, and will come into force on 15 February 2005. These Regulations were the subject of a consultation paper issued on September 2004. The Government has stated that these Regulations are designed to protect the position of members whose defined benefit scheme winds up by ensuring that “the pension schemes will have a claim more akin than presently to the members’ pension expectations”. The main changes focus on raising the level of debt triggered on scheme wind-up to full buy-out in all cases. However, there are also new disclosure requirements for trustees where members seek a transfer payment from a scheme winding-up.