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.
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