UK - Scheme wind-ups are facing costly delays because the department for work and pensions is focusing resources on the Pensions Bill, lawyers claim.
Trustees are unable to complete wind-ups because new regulations on “deemed buyback” have not yet been published.
The rules allow underfunded schemes to pay back part of a member’s assets to the government, in exchange for it taking on their contracted-out state pension liabilities.
The DWP promised trustees in March that it would replace the old regulations, which expired in 2002, by this month.
The DWP says the draft regulations will be published “as soon as practicable” and indicative calculations would be produced as an interim measure.
It added: “These are based on what we expect the actuarial tables/calculations to contain. These indicative calculations will keep the process moving forward, until the revised regulations come into force.”
But Hammonds partner Philip Sutton believes there is no chance of the new regulatins being ready this month.
Sutton is currently advising a scheme which sent out an announcement to members in May in the expectation that deemed buyback figures would be ready this month.
He said: “The DWP pensions resource is being completely targeted at the Pensions Bill and the fact that these regulations have yet to appear means that ultimately schemes still cannot wind up.”
He added that while the “indicative calculations” would be useful in communicating with members, schemes could not lawfully complete their wind-ups until the new regulations were published. This, he said, would cause them further cost and delay.
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