The Department for Work and Pensions has published a report [PDF] of the Government's review of how to speed up the winding up of defined benefit occupational pension schemes, as recommended last March [PDF] by the Parliamentary and Health Service Ombudsman.

The report outlines how schemes are wound up and makes proposals for how the process can be speeded up. The Government believes the key activities should be completed within two years. (If you disagree, or if you have other ideas about how to speed up winding up, the DWP would like to know by 14 December 2006: to that extent, this is a consultation).

New legislation is promised which will require schemes in wind up to report to the Pensions Regulator (TPR) after two rather than three years. It will also provide an override to assist discharge of trivial pension rights through lump sum payments: trustees of some older schemes presently lack this power.

Of course, some schemes have already spent more than two years in wind-up. In their case, the Government expects the process to be completed certainly within two years from now, taking account of the improvements set out in this report.

To help achieve the new target TPR will:

• target administrators and/or providers that hold significant portfolios of schemes that are winding up, and where those schemes seem to have been winding up for the longest amount of time;
• where appropriate publish information on the time schemes are taking to wind up, when the scheme return cycle is complete;
• consider publishing reports of individual investigations and outcomes under PA 2004 s.89;
• ensure that, where it appoints an independent trustee to oversee a winding up, the trustee does so effectively and in a timely fashion (under threat of removal from the register); and
• support trustees and administrators with an e-learning (TKU) module on wind up and guidance on how it will regulate schemes winding up and what it considers to be best practice.

Historically, one of the main difficulties schemes have experienced in winding-up has been GMP reconciliation (ie the process of checking the scheme's records for GMP liabilities against the Government's records). NISPI's Shared Workspace pilot, which allows HMRC and scheme administrators to exchange data electronically, is designed to improve this situation. HMRC is going to extend the scope of this project, and in addition promises to:

• set up another pilot exercise, bringing together all the interested parties in a winding up at the earliest stage to agree a timeline and strengthen communications;
• further publicise the services which NISPI provides; and
• extend the scope of and streamline internal processes for the cancellation of contracting-out certificates.