The Pensions Regulator

Key points

• Abandonment of a pension scheme occurs where the sponsoring employer severs its link with the scheme without providing the scheme with sufficient funds or assets to compensate for losing the ongoing support of its employer.
• This guidance is aimed at trustees and advisers involved in any arrangement that may result in a scheme being abandoned. It is also relevant to employers considering such arrangements.
• Trustees should consider the operation and effect of all employer transactions and should take independent advice before agreeing to any proposed abandonment arrangement.
• Abandonment is not likely to be in the members' best interests where the new sponsoring employer is a nominal employer.
• We encourage early discussion to consider suitable alternatives if trustees believe an arrangement could result in abandonment.