Share sales—using a pension schedule
Produced in partnership with Wyn Derbyshire of gunnercooke LLP

The following Pensions practice note produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Share sales—using a pension schedule
  • When can a pension schedule be used on a share sale?
  • The purpose of a pension schedule in a share purchase agreement
  • Standard provisions in a pension schedule
  • Issues relating to interim participation
  • Preliminary considerations—participation of a non-associated employer
  • Agreeing the terms of the interim participation
  • Section 75 concerns
  • Issues relating to transfer of accrued rights to the buyer’s scheme
  • Transfer basis and actuarial assumptions
  • More...

Share sales—using a pension schedule

This Practice Note should be read in conjunction with the following documents:

  1. Pensions schedule: acting for sellers in a share sale EFP vol 31(1) PENSION SCHEMES [2485]–[2490]

  2. Pension schedule: acting for buyers in a share purchase EFP vol 31(1) PENSION SCHEMES [2479]–[2484]

When can a pension schedule be used on a share sale?

A pension schedule may be used, in the context of a share sale, where:

  1. a buyer acquires shares in an employing company (the target company) which, immediately before completion, participates in a defined benefit (DB) occupational pension scheme

  2. the DB scheme is still open to future accrual, and

  3. the DB scheme itself is intended to remain with the seller's group after completion (referred to in this Practice Note as the seller’s scheme)

A pension schedule may also be used in other circumstances.

In these days of underfunded DB schemes and exposure to the Pension Regulator’s widespread moral hazard powers, pension schedules are rarely encountered. Some pensions lawyers of considerable seniority may never have encountered a pension schedule during the course of their professional practice. This is because buyers are increasingly reluctant to take on responsibility for any DB liabilities and will heavily negotiate in favour of solutions which provide the target company with a clean break from any kind of DB exposure from completion. Since pension schedules are typically used in

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