UK - Norwich Union is axing its pension scheme wind-up service - a decision which lawyers say will leave trustees "high and dry".
The insurance giant said the decision was due to “the difficulty and cost of maintaining skills, knowledge and systems” that were compliant with new wind-up legislation.
It has given trustee clients until September 30 to find another scheme administrator and actuary or the option of transferring to consultant Jardine Lloyd Thompson with which it has a business partnership.
A leading law firm says the withdrawal of a scheme’s actuary and administrator mid wind-up will cause delays and will leave scheme trustees “high and dry”.
Hammonds partner Philip Sutton, who is acting as a trustee for two schemes in advanced stages of wind up with Norwich Union, agreed.
“Trustees at schemes are under pressure to complete wind ups quickly and a decision by the scheme administrator to pull out is only going to slow the process because somebody is going to have to read into and re-learn the file, the scheme and all its idiosyncrasies.”
Sutton added: “Trustees may want to review the terms of their policy with Norwich Union to ascertain whether it is acting within the contractual terms agreed between them.”
Eggar Trustees director Vernon Holgate (pictured), who recently began the trusteeship of a scheme from Norwich Union, said:
“We are concerned as to whether we would be able to complete the selection and due diligence process involved for getting a new administrator and actuary on board in the time frame being asked, and some trustees may be less well placed than us to do that.”
Ex-BHS owner Dominic Chappell has been ordered to pay a total of £87,000 in fines and court costs after he was found guilty of failing to provide The Pensions Regulator (TPR) with information.
The Department for Work and Pensions (DWP) has said it while believes in the benefits of consolidating defined benefit (DB) schemes, there are significant issues to overcome.
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