A leading authority at Dalriada Trustees, one of the UK’s largest independent pension trustee firms, says that professional Insolvency Practitioners (IPs) have ‘nothing to fear’ from the Pension Protection Fund’s (PPF) updated General Guidance for Restructuring and Insolvency Practitioners.
But Richard Favier, Trustee Representative at Dalriada Trustees and a former Head of Insolvency and Restructuring at the PPF, says that dubious pre-pack administrations will be looked at especially closely: “IPs’ proposals to the PPF, including the associated fees, will need to demonstrate added value,” he says.
The guide sets out the criteria that IPs should incorporate in any proposal made to the PPF in respect of an insolvent employer. It highlights the PPF’s understanding of the roles and responsibilities of an IP, throughout the restructuring proposal assessment process, which include:-
- When and how the IP should involve the PPF;
- When the PPF will get involved in the restructuring of an insolvent business and the criteria for doing so; and
- What happens if the criteria are not met.
“If the criteria are not met, IPs run the serious risk that the PPF will simply disregard their proposals,” Richard adds. “Good IPs will not be affected, since they already comply; others, however, will have to up their game and ensure better practices are demonstrated.”
Dalriada believes that the new Guidance will help drive closer cooperation between the insolvent employers, IPs and the Trustees: “The Guidance also aims to discourage attempts to ‘dump’ pension schemes on the PPF,” Richard continues.
“Where a restructuring is proposed, IPs are reminded to engage early and work collaboratively with the PPF, experienced Trustees, and the Regulator.”
The guidance can be viewed here.