Corporate transactions and restructuring
Meet our corporate transactions and restructuring specialists
The impact on a company’s defined benefit (DB) pension scheme can be a big part of corporate transactions, including mergers and acquisitions (M&A) and refinancing and restructuring cases.
Pension trustees need to fully understand the effect a corporate transaction or sponsor refinancing may have on the pension scheme and its members. Ensuring trustees have the right knowledge, experience on a trustee board is extremely important to avoid undue reliance on costly, and occasionally over-engineered third party advice. This will help cut through complexity and ensure the scheme and its members aren’t put at risk. Our expert professional trustees have the requisite experience and expertise required to ensure the impact upon members is considered and suitably addressed.
Ensuring an M&A transaction or refinancing process is open, collaborative and targets an outcome acceptable to all parties requires decisive and energetic trustees who focus on the key priorities. The Pensions Regulator (TPR) highlights it’s important for:
- sponsoring employers and pension trustees to work together to understand the impact the corporate event may have on the pension scheme and whether mitigation measures are needed;
- conflicts of interest to be well managed – both pension trustees and the employer may need independent advice; as well as
- a systematic approach is taken to recording advice, decisions and outcomes to evidence the actions undertaken in the event TPR considers it has caused material detriment to the pension scheme.
How we can help
This is where our experience as professional independent trustees and trained mediators, together with our close working relationship with TPR, and the Pension Protection Fund, adds considerable value. With extensive knowledge and expertise, our friendly team of corporate transaction specialists provides the support pension schemes and sponsors need in what can be very challenging circumstances.
The Pensions Act 2021 brings the prospect of increased sanctions for those that fail to notify TPR or adequately address any material detriment to a pension scheme as a result of corporate activity. It’s advisable to know the regulatory requirements and take them seriously.
We guide and support you (steering you through TPR’s clearance process if needed) to come to agreement quickly and efficiently, no matter how complex your situation is. Situations we help with include:
- corporate transactions including merger, acquisition and divestiture, as well as compromise arrangements
- a change in the pension scheme sponsor’s financial status or weakening of the employer covenant due to events like share buy backs, sale and leaseback transactions, a return of capital, refinancing/increased borrowing resulting in a change in the level of security for the scheme
- group re-structure, merger of employers or replacement of a participating employer
- phoenix events following sponsoring employer insolvency
- all restructuring and proposed insolvency transactions
Case Study
M&A
We have a proven track-record in guiding pension schemes through M&A transactions and protecting member benefits…
Our client
- a pension scheme whose sponsoring employer had interest from a private equity firm in acquiring their entire business.
Objectives
- to ensure that the interests of the scheme members were being protected at all times, seeking and negotiating appropriate mitigation if their position was being diluted as a result of the transaction
The outcome
- We led detailed negotiations with all parties, that allowed us to procure a mitigation cash payment, reduce terms of the recovery plan, and also enhance the security for the scheme – through a new parental guarantee from its new employer group.
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