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The assessment process can last up to two years

During this time, we investigate two key questions:

  • Can the pension scheme be rescued?
  • Can the pension scheme afford to secure benefits which are at least equal to the pensions we can pay?

If the answer to either of these questions is ‘no’, and the relevant processes have been completed, the scheme members will be transferred to us.

If the answer is ‘yes’, the scheme will either continue or wind-up without our involvement.

We’ve outlined the key steps involved in the assessment process below.  

We validate the scheme

When we receive an S120 insolvency notice about a scheme’s sponsoring employer, we validate the scheme to determine whether or not it should go through assessment. This takes up to 28 days, depending on the complexity of the scheme.

We appoint firms with specialist skills

After a scheme has been validated, we appoint firms with specialist skills and knowledge to take it through assessment as efficiently as possible. These specialists will usually include a trustee, an administration firm - who will also carry out the valuation later in the process - a legal adviser and an auditor.

The advisers will draft a project plan

The specialist advisers complete their checks on the scheme and then put together a draft project plan and budget for our approval. We usually approve these plans within three months of receiving the initial insolvency notice. 

We cleanse scheme and member data

Scheme and member data is analysed and organised so that:

  • Members are paid the correct amount of pension benefits
  • A valuation is carried out that will give the true funding position of the scheme

Depending on the complexity, and any problems found, this stage could take anything between three to 18 months.

An actuary will decide if the scheme is underfunded or overfunded

An actuary will carry out an ‘S143 valuation,’ which determines whether the scheme transfers to us or not.

If the scheme is underfunded, it will transfer to us. The administrator will start working on the data that will allow us to take over pension payments. About three months later the scheme will transfer to us.

If the scheme is overfunded, it will go through an insurance buyout to secure members compensation that is equal to or higher that the level of compensation we would pay.