Hopes for a fairer priority order for consideration of pension rights when an occupational pension scheme is wound up have been only partially satisfied today, after the DWP laid amending regulations (SI 2004/1140).

The Government's original objective, initially proposed in the December 2002 Green Paper, was to share the assets more fairly between pensioners and non-pensioners. As outlined in the DWP's June 2003 "Action on Occupational Pensions" and in more detail on 22 October 2003 in draft Amending Regulations, this was to be achieved by

1. promoting non-pensioners' non-contracted-out accrued rights above pension increases;
2. combining them, for priority purposes, with contracted-out rights; and
3. dividing the total accrued rights into two priority categories. In the first, each member will have N/40ths of their accrued rights, where N = years of scheme membership; in the second (ranking immediately below and on the same level as refunds for members with less than two years pensionable service who are not entitled to accrued rights) the balance.

The first two goals have been achieved by today's new Regs, but the third has been abandoned.