The Occupational Pension Schemes (Winding Up and Deficiency on Winding Up etc) (Amendment) Regulations 2004 (SI 2004/403) were laid before Parliament yesterday and come into force on 15 March 2004. Solvent employers who choose to wind up their pension scheme will have to fund the full buy-out cost of members' accrued rights - with retrospective effect to 11 June 2003.

The Regs differ hardly at all from last June's consultation draft. The only change of any significance is in the wording of Reg 1 (4), which limits application of the full buy-out debt to cases where the date on which the assets and liabilities are calculated is on or after 15 March 2004. A solvent employer who triggered scheme wind-up on or after 11 June 2003 thus has a very small window of opportunity left in which to avoid imposition of full buy-out, ie by ensuring the calculation date is before 15 March 2004.

In a separate analysis of the responses received to the consultation draft, the DWP makes clear that all - even those which arrived late - had been accepted. The main issues were:

• The value of transfers (it was suggested members asking for a TV during wind-up should get the full buy-out value. DWP has not accepted this, but may amend Disclosure Regs to require members to be told they might not get as much via a TV as if they wait until winding-up is complete.).

• The definition of insolvency used and the differing levels of debt for solvent employers and employers in liquidation (companies in Members Voluntary Liquidation are regarded as insolvent, while companies in administration or receivership are regarded as solvent. The loophole has been recognised: Clause 95 of the Pensions Bill changes the definition of insolvency for employers that will be used in future.).

• The effect on multi-employer schemes (few of these are affected, the DWP believes, and those that could be are prudently funded, so not considered an issue.).

• The level of authority that trustees would have (the issue here was that although Action on occupational pensions referred to solvent employers winding up schemes, the Draft Regs would affect the balance of power and allowed trustees to unilaterally trigger winding up. DWP has rowed back on this, and will now require trustees to obtain the employer's agreement on key issues relating the scheme funding, and where agreement cannot be reached, to report the matter to the new Regulator (Clause 186 of the Pensions Bill).).

• The ability to make compromise agreements (the concern was that trustees could be forced to compromise the debt if the employer threatened to go into liquidation. DWP reminds trustees of their fiduciary duty and the fact that any compromise agreement and the information on which it is based, including the company's accounts and assets, is liable to be investigated by Opra or its more proactive successor.).

• Issues around the annuity market (ie the fact that the very limited size of the deferred annuity market at present means it could be very difficult for larger schemes to be bought out - or even for trustees to obtain reliable quotations on which to estimate the cost of the debt. The DWP has dodged this issue, saying that the debt is based on "the actuary's estimate" and that non-pensioners can always take a transfer value instead of purchasing an annuity. In the June 2003 condoc, the Government said it "assumes that schemes with more than £500 million in assets will not wind up, due to the limited annuities market").

• The effects upon the priority order (where the scheme did not get the full buy-out amount, the effect of the priority order would be that those at the top got the full buy-out and those lower down significantly less. DWP has decided to deal with this issue via amendments to the statutory priority order - which is the other key set of Regs we have been waiting for since last summer, and of which there is presently still no sign.)