The key messages from Michael's presentation were:
- Scheme sponsors should treat the pension scheme as a subsidiary of the business
- Trustees need to be proactive from the moment contributing pension scheme members no longer earn pension benefits
- Whilst trustees are responsible for the road to wind up, there are other stakeholders including the sponsor, advisers and the Pensions Regulator, all of whom need to work in partnership
- Trustees should have a business plan which should be shared with the sponsor to ensure that both are aligned. This plan should be kept under review
- There should be pre-determined triggers at which point the trustees would expect to take some action. Trustees should not ignore these in the belief that future market movements will improve scheme finances
- Not planning is not an option – trustees, the scheme sponsor and other stakeholders need to understand that the road to wind up does not happen by osmosis
In response to questions from the audience, Michael expressed concern over the Pensions Regulators view that two years is sufficient time to complete a scheme wind up, as the timescale alone is not a measure of whether the wind up is being handled professionally and the members benefits safeguarded.
In Michael’s experience, a professional trustee can help trustee boards work through all the necessary processes involved in taking a scheme to wind up.
Read Michael Clark’s presentation