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Discontinuance - Coggle Diagram
Discontinuance
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The scheme documentation might also specify how members' benefits are to be secured in the event of discontinuance, or this might be left to the discretion of the trustees and/or sponsor. Options that might be available are:
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The scheme documentation and any overriding legislation sets out the benefits that the members are entitled to in the event of a scheme discontinuing.
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In the UK the Trust Deed and Rules, as overridden by the Pensions Act 1995 and subsequent legislation, will set out an order of priority for settling the benefits.
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If there is a surplus, the trustees are likely to have the power to distribute the surplus, e.g. to augment benefits.
The Trust Deed and Rules, ownership of the surplus and the expectations of various parties might influence this distribution.