Eversheds International

Pensions

Corporate transactions

The challenge for employers

In recent years the prominence of pensions issues in the context of corporate transactions has increased significantly. This has been caused by the fact that when a company exits a multi-employer defined benefit scheme, it has, since 2 September 2005 had to pay its share of the scheme's deficit calculated on the expensive buy-out basis and by the introduction of the anti-avoidance regime.

Companies such as Marks & Spencer, WHSmith, Sainsbury's and Boots have all experienced the increasingly influential role which trustees of defined benefit schemes (as a material unsecured creditor) can have on the structure and success of a corporate transaction.

How we can help

We have a vast amount of experience carrying out due diligence and advising on the pensions aspects of corporate transactions. This includes advising trustees and employers on the following issues, which are often key concerns in the context of a corporate transaction:

The need to seek clearance from the Pensions Regulator.
Whether a debt is payable by an exiting employer and, if so, how it should be dealt with?
What pension rights and liabilities will transfer to the purchaser as a result of the transaction?
What future pension benefits is the purchaser required to provide to the transferring employers?
Whether the trustees have the ability to effect a bulk transfer without the members consent.