Share sales—pensions warranties

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

  • Share sales—pensions warranties
  • Acting for the buyer
  • Seller's limitation of scope of warranties
  • Share sale agreement—general provisions
  • What should pensions warranties cover?
  • No other pension schemes
  • Provision of information
  • Compliance
  • Disputes
  • Warranties specific to defined contribution schemes
  • More...

Share sales—pensions warranties


A share sale agreement will typically include warranties given by a seller in favour of a buyer.

A warranty is a statement by the seller that a particular fact is true, eg a seller may warrant that a particular pension scheme is the only scheme the target company participates in.

Pensions warranties in the agreement will sit alongside warranties on other areas such as real estate and tax or, alternatively, be contained in a separate pensions schedule appended to the agreement. However the agreement may be drafted to provide that warranties in one subject area cannot be relied upon in a different subject area; this means that their substance (such as compliance with laws) would need to be repeated as needed for pension purposes.

This Practice Note explains the need for pensions warranties in share sales, their characteristics, the practical considerations when acting for a buyer or seller and some examples of pension warranties.

Acting for the buyer

Ideally, the buyer should undertake a detailed investigation of the pension arrangements of a target company (and any subsidiaries) to protect itself as fully as possible. Completion of a thorough due diligence exercise will help the buyer understand the risks and liabilities involved with the purchase of the target company. This information gathering phase will highlight the areas

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