The draft regulations implement the requirement that that ring-fenced banks ensure that they cannot become liable for the pension schemes of the rest of the group, or anyone else.

According to the response document, all of the banks who responded to the consultation as well as some of the other respondents raised issues with the clearance process for changes they would make as part of the ring-fencing process as initially proposed.

Stakeholders said that the process would be overly burdensome as the rules seemed to suggest that clearance had to be sought for every minor change.

In response, the government has added a materiality threshold to the requirement to apply for clearance such that banks only need to seek clearance if a change or a series of changes to their pension scheme or the employer group supporting it could be ‘materially detrimental’ to the scheme and its members.

It has also accepted feedback that the draft regulation requiring trustees of the pension scheme to provide information to the members (or survivors) of the scheme about any changes relating to the ring-fencing process was unnecessary and as a result removed the information requirements altogether, on the grounds that trustees are already required to provide such information.

Respondents also pointed out that the legislation, as drafted, implies that individual employees who have transitional tax protections may be disadvantaged by the process of restructuring pension schemes.

The government says it will not address the transitional tax protection issues at this point, given the large uncertainty over how individuals could be affected and over the commercial choices that the banks will want to make in order to separate pension schemes. However, it says it is committed to addressing these issues as they become better understood.

There have also been a number of minor changes to the draft regulation to clarify a range of issues. This includes clarification that the court can order trustees to take the necessary steps to give effect to the pension scheme modifications which had been the subject of the application to the court.

The final regulations have been laid in parliament for debate, and an explanatory memorandum and an updated impact assessment have been published.

The response document is available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil... the final draft regulations are available at http://www.legislation.gov.uk/ukdsi/2015/9780111127667/contents