The Pensions Regulator

AbandonmentAbandonment of defined benefit pension schemes

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Alternatives to the proposed arrangement

67. The pension scheme is expected to be a main focus and source of value of any proposed arrangement that results in abandonment. Trustees should therefore consider a full range of possible alternative options that may be open to the scheme and that may help achieve the employer’s objectives without resulting in abandonment of the pension scheme.
68. Such alternatives may include (but are not limited to):
    • changing benefit accrual;
    • managing investment risk;
    • managing inflation risk;
    • managing longevity risk;
    • buying out benefits with a regulated insurance company;
    • using third-party insurances;
    • winding up the pension scheme; and
    • introducing more risk-sharing with the members of the pension scheme.
69. It is not reasonable for trustees to be forced to accept, at face value, abandonment as the only option open to the scheme in response to the circumstances or standing of the employer.

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