'Chapter 8: Winding up' of the Occupational Pension Schemes Survey (OPSS) annual report 2011 covers occupational schemes which are in the process of winding up.
Another group of schemes with special characteristics is those which are winding up. In the 2011 survey, the sample of winding up schemes was selected from the list of winding up schemes held by the Pensions Regulator. All of these schemes were in the private sector. During a process of telephoning schemes to check their status prior to sending out questionnaires, some additional schemes were found to be winding up and were added to the sample of winding up schemes. The schemes in the winding up sample were sent a shorter ‘winding up questionnaire’. Any schemes which had completed winding up by 6 April 2011 were excluded from the survey and treated like other out of scope schemes (see Chapter 10).
Comparatively few responses were received from this type of scheme. Only 68 schemes from the 2011 winding up sample returned completed questionnaires, so caution should be exercised in interpreting the results. Of these 68 schemes, 14 had begun the winding up process after 6 April 2010. On the other hand, 34 had begun the process more than five years before the 2011 survey reference date of 6 April 2011.
There were an estimated 376,000 members of private sector schemes which were winding up in 2011. This figure comprises 99,300 pensioner members who were receiving pension payments, and 276,700 ‘deferred members’. Deferred members are those with preserved pension entitlements including widows, widowers, dependants and pension credit members with some preserved pension (pension credit members in this context meaning former spouses of members who have gained their rights as a result of a pension credit following pension sharing on divorce).
By definition, there can be no active (employee) members of a scheme which has begun winding up, because winding up cannot commence until the last active member has left pensionable service and become a member with a preserved pension entitlement.
There are important distinctions in the legislation on winding up schemes according to whether a scheme is defined benefit or defined contribution. As elsewhere in the survey, hybrid schemes were classed as defined benefit schemes. In 2011, 69 per cent of members in private sector winding up schemes were in defined benefit schemes. 64 per cent of members of defined benefit schemes which were winding up in 2011 were deferred members, while 94 per cent of members of defined contribution schemes which were winding up in 2011 were deferred members.
Winding up schemes were asked whether they had one or more sponsoring employer. Of the 68 schemes, 55 had only one sponsoring employer in 2011. These schemes were also asked about employer solvency. In 2011, 49 per cent of their members belonged to schemes where the employer was insolvent.
Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: email@example.com
These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.