Winding up

The main legislative provisions governing the winding up of occupational pension schemes are:

1. •

   the Pensions Act 1995 (PA 1995, ss 73–74)

2. •

   the Occupational Pension Schemes (Winding Up) Regulations 1996, SI 1996/3126, and

3. •

   the Occupational Pension Schemes (Winding up etc) Regulations 2005, SI 2005/706

An occupational pension scheme may be wound up for a number of reasons, eg because:

1. •

   the membership of the scheme (active and deferred) is too small to justify the cost of continuing to operate it

2. •

   the sponsoring employer is in breach of an important provision in the trust deed and rules (eg the contribution rule) and has failed to correct that breach within a reasonable period, or

3. •

   the scheme has simply become uneconomic and unaffordable for the employer(s) to sustain without putting the whole business at risk of collapse