The rights of holders of deferred shares are deferred to the rights of holders of other classes of shares with regard to entitlement to a dividend, voting rights and rights on a return of capital. Deferred shares have commonly arisen on a conversion of shares where convertible shares convert into a certain number of ordinary shares. A company’s articles of association may provide that if the resulting nominal value of the ordinary shares is less than that of the original convertible shares, the excess nominal value will be converted into deferred shares. This ensures there is no reduction of capital on a share conversion.

This Practice Note provides practical guidance on applying for a duty deferment account in Great Britain and Northern Ireland to defer the payment of import duties, excise duties and where appropriate, import VAT. It provides guidance on who may apply, how to apply for a waiver guarantee and what supporting documentation needs to be submitted. Introduction It is possible to defer the payment of customs duties, excise duties and import VAT when importing goods. To do so, an importer (or someone representing an importer) must apply for a duty deferment account. Once the importer has a duty deferment account the importer would make one payment (for customs duties, excise duties and import VAT) a month. The single payment thus avoids having to pay for each imported consignment. The payment is made via direct debit. To set up an importer’s direct debit, use the Customs Declaration Service (CDS). Importers who are registered for VAT can account for the import VAT on the importer’s VAT return instead of paying import VAT via the duty deferment

Not enough money in a pension scheme – based on certain assumptions.

The length of time taken by an employer to discharge a pension fund deficit.

ARCHIVED: This archived Practice Note provides information on the legal framework which had previously been put in place under the Pension Schemes Act 2015 to enable the creation of defined ambition schemes such as collective defined contribution (CDC) schemes. It is not maintained and is for background information only. For information on the current legal framework for CDC schemes, see Practice Notes: Collective defined contribution (CDC) schemes—an introduction and Collective defined contribution (CDC) schemes under the Pension Schemes Act 2021. What is a defined ambition scheme? One of the key principles of defined ambition is the idea of ‘risk sharing’ in the sense that neither the employer nor the members bear all or a majority of the risk in the pension scheme. A defined ambition pension scheme has some features that are found in a traditional defined benefit (DB) pension scheme and some features that are found in a traditional defined contribution (DC) pension scheme. The Department of Work and Pensions (DWP), in its 2012 strategy paper,

Benefits calculated by reference to a fixed formula, irrespective of the contributions paid or in-vestment performance.

THIS PRACTICE NOTE RELATES TO DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES Historically at least, one of the most controversial issues arising in relation to a defined benefit (DB) occupational pension scheme has been the question of who has the right to and what should be done with the scheme’s ‘surplus’ should there be one. The issue was particularly acute since the boom of the 1980s and 1990s, reflected in many of the relevant cases reported in the 1990s and early 2000s. It seems it has been less of an issue since then as scheme funding has changed and the essential legal framework—as summarised below—is settled. Nevertheless, as most DB schemes presently report a surplus, those principles remain relevant today. As mentioned at the end of this Practice Note, those beneficial funding levels have prompted the government to seek to liberalise the use of those surpluses in aid of greater UK-wide investment in the future. When is a surplus relevant? Issues relating to surpluses most often arise: • during a scheme’s ongoing

Lump sum death benefit paid in respect of a member of a defined benefit scheme.

Although defined benefit pension schemes (DB schemes) are in decline in the private sector, there still remain in excess of 5,000 private sector DB schemes with over nine million members. Concerns around underfunding and employers attempting to evade liability have resulted in a complex regulatory and legislative landscape that mean DB schemes should be considered by lenders and their lawyers at the outset of a transaction and during any restructuring or insolvency. The Pensions Act 2004 (PeA 2004) gave the Pensions Regulator (TPR) the ability to issue contribution notices or financial support directions to parties connected or associated with the scheme employer, making them liable to provide support or funding to underfunded DB schemes (known as ‘Moral Hazard’ powers). Further, PeA 2004 introduced a legal requirement to notify TPR about various events which occur in relation to a scheme employer under a DB scheme. This includes a requirement to notify TPR of a breach of lending covenant. The issue of underfunded DB schemes was drawn into the spotlight again following a

The charities sector in the UK is significant in size. There is a wide range of pension provision across the sector. Many charities are facing financial pressures as a result of a combination of factors including: • increased running costs • new running costs (such as needing to adopt new systems to maintain cyber security) • heightened demand for services • workforce challenges • decrease in the amount of giving • grant-making bodies having less money to distribute and future funding being uncertain, and • investment instability While defined contribution (DC) pension schemes have increasingly become the norm for charity employees (often as a result of automatic enrolment compliance), many charities still have to deal with their legacy defined benefit (DB) pension schemes. This Practice Note therefore looks at the issues for charities with trust-based occupational DB pension schemes. As mentioned, many charities will have been offering new employees DC pension provision for some years now (usually due to the lower financial risk for the scheme sponsor). This may be

An occupational pension scheme that provides benefits based on accrual rate, pensionable service and pensionable earnings.

Pensions analysis: In the Autumn Statement 2023, the Chancellor of the Exchequer, Jeremy Hunt, announced a series of measures aimed at unlocking the £1.4trn in assets currently held in defined benefit (DB) pension schemes. As part of this, on 23 February 2023, the Department for work and Pensions (DWP) in its consultation on ‘Options for Defined Benefit schemes’ addresses the potential to introduce reforms to the private sector DB pensions system to help with this target. Stephen Richards, partner at Stephenson Harwoods examines the measures in the new consultation.