Trustee Guidance: Responsibility for the Pension Scheme Assumed
Introduction
The assessment period will conclude with the Board of the Pension Protection Fund assuming responsibility for a scheme when the following conditions have been met.
- A pension scheme rescue is not possible and a scheme failure notice is binding.
- A section 143 valuation shows that the pension scheme’s assets are not sufficient to secure the Pension Protection Fund protected liabilities.
- The Board of the Pension Protection Fund’s approval of the section 143 valuation is binding
Within two months of the section 143 valuation becoming binding the Pension Protection Fund is required to issue a transfer notice.
On receipt of the notice the trustees are discharged of their responsibilities for administering the scheme and the assets and prescribed liabilities are transferred to the Board of the Pension Protection Fund.
The pension scheme is then treated as having wound up.
This guidance will be continually updated and enhanced as experience provides us with greater insight and knowledge in this area.
Objectives
To ensure the pension scheme is efficiently transferred to the Board of the Pension Protection Fund
Key Activities for Trustees
Provide a transition plan to ensure the smooth transfer of assets and data to the Pension Protection Fund.
This plan will be agreed with the caseworker. The plan should include:
- communicating with scheme members
- the transfer of the electronic data and hard copy files (the preparation of the data should have been completed during the data audit)
- the transfer of assets to the Pension Protection Fund
- the transfer of payroll responsibilities
- actions to ensure any member events that arise during the transfer period are dealt with appropriately
- paying scheme professionals’ final fees
- providing the Pension Protection Fund with details of any outstanding issues
Key Activities for the Pension Protection Fund
Agree the transition plan and then confirm that plan has been delivered.
Issue the transfer notice at which point trustees are discharged of their responsibilities, however, the Pension Protection Fund will continue to work with scheme advisors and administrators to complete the transfer.
Assume responsibility for paying compensation and issue communication to scheme members explaining this.
Created May 2006
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