Pensions due diligence in share sales—issues specific to DC schemes

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

  • Pensions due diligence in share sales—issues specific to DC schemes
  • Due diligence and DC arrangements—key issues
  • Auto-enrolment
  • DC governance
  • For DC trust-based occupational pension schemes
  • For workplace personal pension schemes
  • Issues specific to DC occupational pension schemes
  • Target's status in the scheme
  • Is the scheme closed or open to future accrual?
  • Contributions payable
  • More...

Pensions due diligence in share sales—issues specific to DC schemes

THIS PRACTICE NOTE APPLIES IN RELATION TO PRIVATE SECTOR DEFINED CONTRIBUTION PENSION ARRANGEMENTS

This Practice Note considers the due diligence issues to look out for in a share sale, where the target company participates in, or contributes to, a defined contribution (DC) scheme. In this Practice Note, references to the 'target company' include the subsidiaries of the target company (since they also transfer to the buyer's group on a share sale).

For an overview of the pensions aspects of due diligence in a share sale, see Practice Note: Pensions due diligence in share sales—an introduction.

For a detailed review of the due diligence issues which arise where the target company participates in a defined benefit (DB) pension scheme, see Practice Note: Pensions due diligence in share sales—issues specific to DB schemes.

Due diligence and DC arrangements—key issues

Where the target company participates in, or contributes to, a DC pension arrangement, the buyer and its solicitors should look out for various pension issues. Those issues will differ to some extent, depending on the type of DC pension arrangement the target company has in place.

The key issues for the buyer to look out for in relation to DC arrangements are as follows:

  1. auto-enrolment compliance

  2. DC governance, ie what steps have been taken to ensure a good DC governance

  3. issues specific to DC

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