Advising major UK corporate on pensions merger and reduction of its PPF levy

We advised a UK corporate on a merger of its three defined benefit occupational pension schemes into a new scheme. The merger was to be structured by means of a bulk transfer of members' accrued pension benefits in the transferring schemes with a proposal that encompassed an option for relevant members of the transferring schemes to receive a winding-up lump sum following the bulk transfer.

The project involved agreeing the provisions of the merger deed, which included complicated indemnity provisions, and reviewing the trust documentation for the new scheme.

Our team advised the same corporate in relation to ways to reduce its PPF levy exposure for the 2013/2014 scheme year. Previously the scheme had the benefit of a group guarantee, but due to the changes in the PPF’s guidelines, this guarantee could not be re-certified by the trustees for 2013/2014. This raised the prospect of a greatly increased risk-based PPF levy, ultimately payable by the company.

We reviewed and negotiated a suite of complicated pensions documentation to put the new arrangements in place.

Return to case studies