Restructuring / M&A
Pensions-related issues can be one of the biggest obstacles to a company carrying out the corporate restructuring, acquisitions or disposals that are needed as part of its overall business strategy. Not only are the issues more complex, but the regulatory framework is arguably more challenging to navigate than at any previous time.
However, as long as the pensions issues are identified early and appropriate mitigation strategies are developed, we believe that a company should still be able to achieve its strategic goals.
We have many years of experience of delivering M&A and corporate restructuring projects, having led on some multi-billion pound transactions in recent years. We will work with you to:
- identify your objectives
- carry out a risk analysis and identify barriers to success
- set out the mitigation options
- develop and support your negotiation strategy with all the relevant parties
- guide you through the regulatory requirements and, where relevant, support you in regulatory discussions.
A strong overseas parent wanted to restructure its UK operations, involving changing the principal employer of the main UK defined benefit plan. In light of the trustees’ powers and the Pensions Regulator’s scrutiny, we needed to do the following:
- work with the covenant adviser to analyse the impact on the support available to the scheme as a result of the proposals
- consider how the trustees and TPR would react to the proposals
- develop an appropriate mitigation package
- draft a carefully thought through communication package to help walk the trustees and TPR through the proposals.
As the mitigation package involved multiple tiers of financial support across different countries, the process of working through the proposals with the trustees and TPR happened over a number of meetings, before all parties were happy.
The key to success was careful planning and ensuring the client saw the issues through the eyes of the trustees and their duties.
In the news this week, the pensions world continues to be dominated by the impact of the Covid-19 pandemic, with the Regulator publishing more guidance for employers, the FCA delaying the implementation of its drawdown investment pathways and two household name companies deferring (or missing) their deficit recovery contributions.
Over the autumn of 2019, BAC conducted an extensive survey of the actions which companies are taking to manage their defined benefit (DB) and defined contribution (DC) pension arrangements.
2019 marked 50 years since Neil Armstrong walked on the moon and this was obviously on the Queen’s mind in her Christmas message as she talked about a bumpy year but one with small steps of progress as well. In terms of pensions, it also felt like a year of small steps and occasional bumps. In this quarter’s Arena, we take a positive look back at 2019, as well as looking forward to some expected pension developments over 2020.
Despite the very different circumstances facing individual companies, bac‘s autumn 2019 survey reveals a surprisingly consistent picture of the actions which companies are finding most attractive to manage their DB and DC pension arrangements.
As DB liabilities have become legacy issues to be managed, governance has become the umbrella term for a broad range of risk management tools. In this publication, we look at the DB governance solutions we have helped our clients to implement.