| Commentary

107 Defined contribution schemes

| Commentary

3: IMPLICATIONS OF PENSIONS LEGISLATION ON TAKEOVER OR MERGER

107 Defined contribution schemes

A defined contribution scheme can never be under-funded1. Consequently, most of the provisions in the Pensions Act 2004 under which a sponsoring employer can be required to contribute to its pension fund do not apply to defined contribution schemes2. As a result, the buyer of a target company which runs a defined contribution scheme is mainly concerned to ensure that he has full information about the target’s liabilities under the scheme and confirmation that it has been run in accordance with the relevant

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