Winding up

Winding up

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

•
the Pensions Act 1995 (PA 1995, ss 73–74)
•
the Occupational Pension Schemes (Winding Up) Regulations 1996, SI 1996/3126, and
•
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:

•
the membership of the scheme (active and deferred) is too small to justify the cost of continuing to operate it
•
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
•
the scheme has simply become uneconomic and unaffordable for the employer(s) to sustain without putting the whole business at risk of collapse

Powers of the Pensions Regulator

In most circumstances, the power to wind up the scheme will have been exercised by the scheme trustees. However, in limited circumstances, the Pensions Regulator may take the initiative to wind up the scheme.

The

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