UK - Endemic problems surrounding pension scheme wind-ups may be solved when OPRA's new powers take effect next year, leading law firms believe.
The Department for Work and Pensions’ consultation period on wind-ups will end next week and OPRA is set to enforce new regulations from April 6 next year.
Under the new rules, OPRA will be looking at the actions of trustees who are winding-up schemes and will have the authority to monitor wind-up regulations over a 12 month period.
OPRA regulatory director Joe Robertson said: “In our first year, priority will be given to schemes which have been winding-up for up to 12 years. The year after, we will be dealing with schemes which have been in wind-up for up to nine years and the year after that, for up to three years.”
The long duration before wind-ups are completed and a lack of information to scheme members are two of the most notable criticisms, according to Simmons and Simmons assistant solicitor Kirsty Bartlett.
And CMS Cameron McKenna partner Mark Grant said: ”Problems with wind-ups are more connected to endemic problems in pensions which the government has not resolved.”
Some of the reasons cited by Grant which delayed wind-ups include the issue of sex equality, lengthy ombudsman determinations in settling pension benefit entitlements and the MFR model where there is a disparity between funding requirements and the actual cost to buy policies.
Measures drafted in the new regulations include:
•The appointment of an independent trustee for final salary scheme wind-ups.
•Allowing trustees to apply to OPRA for a time extension.
•The reporting of trustees and administrators to OPRA within three months of the start of a wind-up.
•The requirement to give notice of any modification which must be presented to scheme members.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers