Intra-group reorganisations and pensions
Produced in partnership with Sheamal Samarasekera, Macfarlanes LLP
Intra-group reorganisations and pensions

The following Pensions practice note produced in partnership with Sheamal Samarasekera, Macfarlanes LLP provides comprehensive and up to date legal information covering:

  • Intra-group reorganisations and pensions
  • Key pensions considerations
  • Circumstances giving rise to s 75 debts
  • Managing s 75 debts in an intra-group reorganisation
  • Options available to deal with the debt
  • The restructuring easements
  • Flexible apportionment arrangements
  • Is clearance required?
  • The trustees’ role
  • Key points for trustees
  • More...

The pension implications of an intra-group reorganisation will depend largely on the nature of the group’s pension arrangements. Key pension issues usually arise where a group sponsors one or more occupational defined benefit pension schemes. This Practice Note considers, by reference to two case studies, key issues that employers and trustees should bear in mind when implementing an intra-group reorganisation.

Key pensions considerations

Where the group sponsors a defined benefit (DB) pension scheme, immediate consideration should be given to whether the reorganisation would:

  1. trigger the employer debt liabilities of a sponsoring employer under the Pensions Act 1995, s 75 (the s 75 debt) and, if so, how this could be managed

  2. detrimentally impact the sponsor support available to that scheme, which might in turn:

    1. impact the investment and funding strategy for the scheme, or

    2. expose the sponsoring employers (and parties associated or connected to them) to the Pensions Regulator’s (the Regulator’s) anti-avoidance powers, and

  3. require clearance from the Regulator

Consideration also needs to be given to whether the reorganisation would:

  1. result in a group of employees ceasing to be eligible to participate in the existing pension arrangements and, if so, what action is needed to continue the arrangements or make alternative arrangements

  2. be subject to the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006, SI 2006/246 (TUPE) and the related pension protection provisions that

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