Deficit Definition

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Intra-group reorganisation (by share sale)─checklist

Intra-group reorganisation (by share sale)─checklist This Checklist summarises the key steps involved in an intra-group reorganisation by sale of shares of an English-incorporated company to another English-incorporated company and highlights certain issues which may arise for the company as a result of such process. This Checklist does not claim to be exhaustive, as the issues that arise in connection with an intra-group reorgnisation by share sale and the steps involved in the process will vary from one transaction to the next. For a summary of the key issues involved in an intra-group reorganisation by way of an asset sale, please refer to: Intra-group reorganisation (by asset sale)─checklist. Consideration of a corporate reorganisation may also require specialist assistance in property, employment, pensions, intellectual property, information technology, finance and tax matters. Please consider obtaining further guidance on these areas. For further information, see Practice Notes: IP and IT aspects of intra-group reorganisations and Intra-group reorganisations and pensions. Issue Guidance Determining the reorganisation structure and other preliminary considerations (general) Asset purchase or...

Checklist for approval of CVAs involving the Pension Protection Fund

Checklist for approval of CVAs involving the Pension Protection Fund This Checklist sets out guidance to consider when drafting and seeking approval of a company voluntary arrangement (CVA) where the Pension Protection Fund (PPF) are involved. It is based on a guidance note 5 issued by the PPF in 2018 (see PPF Guidance Note 5: CVAs). When a company which is an employer (or all employers, in the case of a last man standing scheme) lodges a CVA proposal in court, a PPF assessment period will commence. The PPF will acquire the pension trustees’ voting right under section 137 of the Pensions Act 2004 (see Practice Note: The Pension Protection Fund—eligibility and entry). Essentially, the PPF will normally vote in favour or against a proposal rather than abstain from voting. The PPF is always concerned to ensure that it doesn’t set any precedent that would permit any pension schemes to be weakened where there is a possibility of PPF entry in the foreseeable future (the PPF note that...

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How to manage scheme funding deficits

STOP PRESS: On 4 December 2024 the Pensions Regulator (TPR) finally published the updated employer covenant guidance for trustees of DB pension schemes, aligned with its new DB funding code of practice which was brought into effect on 12 November 2024 by the Pensions Act 2004 (Code of Practice) (Defined Benefit Funding) Appointed Day Order 2024, SI 2024/1143. Described by TPR as ‘the last piece of the jigsaw to help schemes carry out valuations under the new DB funding code’, the updated guidance includes the first regulatory definition of employer covenant aiming to provide greater market certainty and promote consistency across schemes. Key updates encompass cash flow analysis, reasonable affordability assessments, maximum affordable contributions, reliability periods, covenant longevity, and contingent assets. The updated guidance emphasises proportionality in covenant assessments and includes worked examples for complex areas. Significantly, TPR expects trustees to use the updated guidance to review whether their existing covenant analysis is focused in the right areas and remains proportionate, especially where trustees have experienced significant changes in their...

How to conduct informal performance management meetings

How to conduct informal performance management meetings This ‘How to’ guide sets out how to conduct an informal performance management meeting. It provides guidance on the structure of meetings, in particular, giving appropriate feedback, basic coaching skills and agreeing an action plan. An informal performance management meeting can usefully be divided into two phases: • explaining in discussion with the employee what the gap is between their actual performance and the performance that is expected of them, and then establishing what the reasons are for this under-performance • agreeing ideas on how to bridge that gap For further information on management of under-performance generally, see Practice Note: How to manage under-performing employees. Establishing the nature of the under-performance and the reasons behind it While there will be a requirement for the manager to give a certain amount of feedback (see Feedback, below), the most powerful tool to use during the meeting is effective questioning. The manager may be very aware of the issues, but it is...

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Special administration—witness statement in support of application for special administration

Special administration—witness statement in support of application for special administration Applicant [NAME OF WITNESS] First Witness Statement Date: [] Exhibit [XX1] Court Reference No: [INSERT COURT REF. NUMBER] [ IN THE HIGH COURT OF JUSTICE] BUSINESS AND PROPERTY COURTS [OF ENGLAND AND WALES] [IN [INSERT LOCATION]] [COMPANY & INSOLVENCY LIST (ChD)] OR [IN THE COUNTY COURT AT [INSERT LOCATION]] [BUSINESS AND PROPERTY COURTS LIST] OR [IN THE HIGH COURT OF JUSTICE] [CHANCERY DIVISION] OR IN THE MATTER OF [INVESTMENT BANK NAME] AND IN THE MATTER OF THE INVESTMENT BANK SPECIAL ADMINISTRATION REGULATIONS 2011 AND IN THE MATTER OF THE INSOLVENCY ACT 1986 _________________________________________ WITNESS STATEMENT OF [WITNESS NAME] ___________________________________________ I, [witness name], director [and chairperson] of [investment bank name] of [investment bank address] WILL SAY AS FOLLOWS: 1 I am [a director and] [the chairperson] of [investment bank address] with company number [company number] (the Company). The Company is a wholly-owned subsidiary of [insert details], a company incorporated in [location]. It is in...

Local government outsourcing contract—template pensions schedule

Local government outsourcing contract—template pensions schedule 1 Interpretation 1.1 The following definitions and rules of interpretation apply in this Schedule: Admission Agreement • means the admission agreement to be entered into on or around the date of the [Outsourcing Contract] between the administering authority of the LGPS and the Supplier Best Value Direction • means the Best Value Authorities (Staff Transfers) Pensions Direction 2007 Broadly Comparable Pension Scheme • a pension scheme formally certified by the Government Actuary’s Department as broadly comparable to the LGPS Customer’s Scheme • the [ [LGPS] OR [other pension scheme] currently operated by the Customer in respect of the Relevant Employees] Fair Deal Guidance • HM Treasury Fair Deal for staff pensions: Staff transfer from central government (October 2013) Onward Transfer Date • the date of transfer of Onward Transferring Employees of the Supplier pursuant to TUPE 2006 on expiry (or earlier termination) of the [Outsourcing Contract] Onward Transferring Employees • the employees of the Supplier who...

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In a company which had a ‘multi-employer’ pension scheme, the administrators are willing to admit the scheme trustee’s debt (based on a valuation of the deficit including a section 75 (of the Pensions Act 1995) certificate). Must the administrators also accept the Pension Protection Fund’s subsequent claim for the entirety of the deficit (ie including all the deficits of all the employers as against only one of them)?

In a company which had a ‘multi-employer’ pension scheme, the administrators are willing to admit the scheme trustee’s debt (based on a valuation of the deficit including a section 75 (of the Pensions Act 1995) certificate). Must the administrators also accept the Pension Protection Fund’s subsequent claim for the entirety of the deficit (ie including all the deficits of all the employers as against only one of them)? Double proof in the administration Administrators may make distributions to creditors of a company in administration either to: preferential creditors, unsecured creditors from the prescribed part under section 176A of the Insolvency Act 1986 (IA 1986), or otherwise unsecured creditors with the permission of the court. If it is appropriate for the administrators to agree the claims of creditors in this case, then the administrators should first of all establish who may make a claim in respect of the deficit by finding out what type of pension scheme it is. The Pension Protection Fund (PPF) deals with eligible defined...

Does the ability of a discretionary trust beneficiary to reclaim tax on an income distribution from a discretionary trust depend on the balance of the tax pool?

Does the ability of a discretionary trust beneficiary to reclaim tax on an income distribution from a discretionary trust depend on the balance of the tax pool? Beneficiaries of a discretionary trust have no entitlement to income, and only receive income at the discretion of the trustees (section 493 of the Income Tax Act 2007 (ITA 2007)). Any income distributed to a beneficiary is deemed to have been paid net of a 45% tax credit. This 45% rate applies irrespective of the income actually received by the trustees. For example, if the trustees' only source of income is UK dividends on which tax is paid at 38.1%, then if that income is subsequently distributed to a beneficiary, it will always carry a 45% tax credit (ITA 2007, s 494). If a discretionary trust makes a distribution to a beneficiary, the distribution and the tax deducted from it is certified on Form R185 (ITA 2007, s 495). Therefore, when a beneficiary receives a distribution of income from a discretionary trust, it...

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No obligation on PPF to warn member about consequences of taking early retirement before pension scheme entered assessment period (Mr S, CAS-98051-N8F9)

Pensions analysis: The Pensions Ombudsman has rejected a complaint about information given on early retirement terms. Martin Scott of gunnercooke LLP looks at the decision.

International arbitration experts discuss the efficiency of artificial intelligence tools in international arbitration

Mealey’s International Arbitration Report recently asked industry experts and leaders for their thoughts on the use of artificial intelligence tools in international arbitration. We would like to thank the following individuals for sharing their thoughts on this important issue.