Pension issues in share sales—where target sponsors a single-employer DB scheme

The following Pensions practice note provides comprehensive and up to date legal information covering:

  • Pension issues in share sales—where target sponsors a single-employer DB scheme
  • Key considerations for the buyer and seller
  • Agreeing what happens to the DB scheme on completion of the share sale
  • Where the parties agree to leave the DB scheme in the seller's group
  • Substitution of principal employer
  • Statutory employer issues
  • What benefits to provide post-completion
  • What happens to the benefits accrued by the target's employees in the DB scheme?
  • What if there cannot be a substitution of principal employer?
  • Where the parties agree to let the scheme transfer to the buyer's group
  • More...

Pension issues in share sales—where target sponsors a single-employer DB scheme

FORTHCOMING DEVELOPMENT 1: On 11 February 2021 the Pension Schemes Bill received Royal Assent becoming the Pension Schemes Act 2021 (PSA 2021). Among other things, Part 3 of PSA 2021 is designed to strengthen the powers of the Pensions Regulator (TPR), including the introduction of new criminal offences targeting certain behaviour in respect of DB schemes (namely the offence of avoidance of employer debt and the offence of conduct risking accrued scheme benefits), making changes to the contribution notice (CN) regime and notifiable events regime (including by requiring corporate planners to make a declaration of intent in respect of certain corporate transactions), broadening TPR’s information gathering powers and extending TPR’s powers to impose civil penalties as well as making changes to TPR’s powers in its oversight of corporate transactions. These provisions have yet to come into force.

More specifically, the PSA 2021 will introduce three new criminal offences to prevent and penalise the mismanagement of DB pension schemes — two of these criminal offences aim to target individuals who mishandle DB pension schemes and thus endanger workers’ pensions. These criminal offences include:
the offence of avoidance of employer debt. A person will commit such an offence if, without reasonable excuse, they intentionally prevent the recovery of part or the whole of an employer’s s

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