The BDO Pensions Advisory team advises companies and pension scheme trustees in relation to ‘employer covenant’ issues (basically, the financial strength of the company(ies) which sponsor a Defined Benefit (DB) pension scheme). This is a key component in setting the pension scheme liabilities and any required deficit recovery plan.
We can help companies and pension scheme trustees prepare for and manage expectations in advance of and through transactions or cash funding valuations (which all DB pension schemes need to go through at least every three years).
Companies may also want to present their employer covenant, or the impact of a transaction, to the pension scheme trustees in the most favourable light. Planning is also important for internal reorganisations where a group of companies sponsor a DB scheme.
New legislation is expected next year, which will place increased obligations on company directors and shareholders to notify pension scheme trustees of transactions at a Heads of Terms stage. If individuals fail to comply, this could potentially result in unlimited personal fines or imprisonment.
Please contact:
Matthew Gibson (tel: 0207 893 2845; email: matthew.gibson@bdo.co.uk)
John Hubbleday (tel: 0207 893 2256; email: john.hubbleday@bdo.co.uk).