Case study

Wind up of pension scheme

The client

A family run company which need to have its defined benefit pension scheme wound up in order to then wind up the company and pay final dividends to the shareholders.

The issue

The pension scheme had been closed to new entrants more than ten years ago and to future accrual back in 2011. The issue was that the scheme had no business plan and the company had no real understanding what the trustees (none of whom were professional trustees) were actually doing. This meant that when the company wanted the pension scheme to be wound up and the liabilities secured with an insurance company the trustees were unprepared for this event.

The solution

We were appointed to Chair the Trustee board and worked with existing trustees and advisers to develop a project plan to prepare for a buy-out and winding up of the trust. This meant ensuring that the administrator cleaned the member data, switched the investment strategy and amended the Statement of Investment Principles to prepare the scheme investments for a buy-out, whilst at all time ensuring that at all times we were acting within the scheme rules. We prepared a plan for communicating to the members and put this in place.


The outcome

By careful project management and goodwill by all of the stakeholders involved in this, the buy-out was completed within seven months and the trust wound up shortly afterwards. Members had their benefits provided in full and arguably with a provider with a stronger covenant than the company could provide.

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