UK - The legislation detailing the Occupational Pensions Regulatory Authority's powers on wind up (in TIS 43/01) has now been finalised and will come into force on April 1, 2002.
There are some changes from the draft legislation:
* Trustees' duty to make progress reports to Opra. This will now apply to schemes which commenced winding up on or after April 1, 1973, not April 1, 1980. The duty will apply even where Opra itself ordered the wind up. It will not apply to small self-administered schemes (SSAS) or to death benefit only schemes with no accrued rights. It will also not apply to schemes which comprise only deferred or pensioner members where there is only one member, or all members are trustees.
* Copies of progress reports must now be sent to beneficiaries (not just members) who request them.
* Trustee duty to report lack of independent trustee. These duties will now not apply to SSASs or to schemes with only one member (who need not be also a trustee) who is a deferred or pensioner member. Trustees must now report in respect of death benefit only schemes, which were previously excluded.
* Duty to report sole trustee employer insolvent. Persons involved in the administration have a duty in certain circumstances to report the insolvency of a sole trustee employer. But schemes are excluded if they are SSASs, have only one member who is a deferred or pensioner member, or are death benefit only schemes with no accrued rights.
* For these purposes there is a list of exclusions from persons involved in the administration. Fund managers were excluded from this but the reference to fund manager has been dropped and the exclusion extended to cover anyone whose only involvement with the scheme is in connection with advising on the management of investments.
* Opra directions against those failing to provide information. Opra can make directions against the trustees or managers or persons involved in the administration of a scheme, or other persons who can be prescribed in legislation, if it thinks that delay is being caused by their failure to provide information to certain categories of person. These categories of person have been extended to include holders of a very wide range of records and those exercising statutory functions in relation to a scheme, which would include the actuary and auditor amongst others.
* Record-keeping. The record keeping requirements apply to decisions made on or after April 1, 2002. They are extended to persons other than trustees and managers who are entitled to make decisions about wind up. Fines will apply for failure to take reasonable steps to comply. If in practice the trustees and others make the decision jointly, they must both make the record. If the other persons (and not the trustees/ managers) make the decision alone, only they need record.
* On a decision to defer wind up, the record should include the date to which the wind up is being postponed (if that is known), or the date when that issue will be reconsidered.
* Application to Opra to modify scheme rules. The information to accompany such an application must now include any actuarial advice given to the trustees/managers on the effect of themodification on scheme assets or benefits.
* Opra power to extend the 12 month interval for annual member disclosure about wind up progress. This proposal has been dropped.
TIS 43/01 will be consolidated shortly to take account of these changes.
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