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Practical Considerations for Trustees in Wind-Up Situations: Key Insights

This guide explores essential practical considerations for trustees managing pension schemes during wind-up situations. It addresses immediate concerns such as assessing the deed/rules, quality of administration records, and the potential for benefit disputes. Trustees must navigate claims from non-members, decide whether to switch assets to cash, and communicate effectively with scheme members. With challenges like increasing priority claims and compliance expenses, understanding the risks and costs involved, including potential liabilities, is crucial. Insights from various sectors highlight the variability in experiences and outcomes.

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Practical Considerations for Trustees in Wind-Up Situations: Key Insights

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  1. Trustees and wind-ups Practical ConsiderationsAlan BroxsonIrish Pensions Trust Ltd

  2. Immediate Concerns • What is contained in the Deed / Rules • Quality of Admin Records • Benefit disputes • Claims from non-members

  3. Other considerations • Switch everything to cash? • What to tell members?

  4. Wind-up or not? • Likelihood of new employer maintaining Scheme? • Claims for additional contributions? • Priority claims increasing • Ongoing compliance expenses

  5. Risks • Cost of defence • Too often costs exceed the fees • Claims may not surface for years • Employer may not be there to honour indemnity

  6. No Surprise • Considerable reluctance to assume Trustee role in a wind-up.

  7. Experience • Ranks Flour Mills Hallmark CardsClover MeatsHospital SweepstakesPrime ComputersDublin Cargo Handlers Waterford Crystal?

  8. Experience • Limited number of large problem cases. • Problems more likely in smaller cases.

  9. Action against liquidator • Large cases with reasonable chance of success. • Small cases - cost vs possible benefit a major consideration • What is contained in formal docs?

  10. Expenses • Seek from liquidator if an employer expense Rarely that clear

  11. Surpluses • Does one really exist?

  12. Surpluses • Almost NEVER returned • Surplus distributed IN CONSULTATION with employer • Our standard practice is to favour actives

  13. Surpluses • Weak Ground - using surplus to add new benefits

  14. But it’s a new ballgame • Talk to me next year!

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