PSI16.2.8 - Discontinuance of Schemes: Winding-Up - Priorities on Winding-Up

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

[PN14.6]

The winding-up rule usually specifies an order of priority among the various classes of member: for example, existing pensioners may be given preference over those with contingent interests and present employees. The Revenue is not concerned about this aspect of the rules, but for contracted-out schemes the Social Security Pensions Act 1975 requires certain benefits to be given priority. Apart from this, the order of classes can be left to the choice of the person setting up the scheme. Except in the case of a money purchase scheme, an employer is required by virtue of section 144 of the Pension Schemes Act 1993 to make good any deficiency of assets needed to meet a scheme’s liabilities on winding-up.

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