Pension Restructuring & Scheme Termination

If your scheme is impacted by corporate change we can help steer the pension scheme effectively and efficiently through these changes.

Corporate transactional and restructuring situations can present an opportunity or a challenge to both the pension scheme and employer. Typically, time is constrained and a failure to deliver timely and informed decision making, can result in a missed opportunity or worse, adverse outcomes. Trustee knowledge and experience in this area is often very limited, increasing further the risk to the scheme and employer.

Dalriada has professional trustees experienced in employer covenant, transactions, restructuring and insolvency who can support/lead the trustee board through the often complex and difficult issues which arise from a corporate transaction or restructuring process  and ensure that the trustee board. 

We:

  • • understand the position, issues, opportunities, challenges and key requirements of the various stakeholders in a transaction or restructuring process;
  • • can quickly ‘get to grips’ with the situation, undertake a rapid assessment of the key risks and formulate an appropriate project plan, prioritising adviser input where necessary;
  • • have the ability, where required, to support/lead/project manage and work more effectively with the relevant advisers (both trustee and company side);
  • • provide credibility with other key stakeholders (company, lenders, shareholders, TPR/PPF and advisers); and adopts a team based approach, integrating the above with the core Dalriada professional trusteeship offering incorporating actuarial, investment and compliance expertise as needs.

We strongly believe that whilst adviser input is important, trustee boards should not be adviser led.

Our market leading team in the transactions and restructuring arena ensures the trustee board can lead the process, taking comfort from our extensive experience and ensuring adviser input is targeted at the areas critical to the scheme and the transaction.

Transactions

When time is limited, it is crucial that the trustee board can move quickly on an informed basis to protect the scheme and members’ interests and maximise the opportunity for all stakeholders.

Mergers and acquisitions, fund raising and refinancing can present an opportunity for a sponsoring employer to prosper and improve the employer covenant, but could also present a risk and threat of potential detriment to the scheme and members.

The transactional environment is often time pressurised and trustees are often asked to assimilate significant amounts of detailed and multifaceted information and, having done so, to act quickly.  Trustees may need to engage tailored covenant, legal and actuarial advice, interpret that advice, and make decisions that could have a significant impact on the future of the employer and the scheme.

At Dalriada we have trustee representatives from all of these key backgrounds who have guided many schemes and employers through complex transactions, providing informed input as part of the trustee board allowing the trustee board to take decisions in confidence.

Restructuring

In a difficult situation, by appointing Dalriada you will be putting the scheme in ‘safe hands’ whilst maximising the prospects of delivering a more efficient and cost-effective restructuring for the benefit of all stakeholders.

Our team is unique and includes chartered accountants, covenant advisory experts, accredited turnaround experience, a licensed insolvency practitioner and the former Head of Restructuring and Insolvency of the Pension Protection Fund (PPF). As such, we have hands on experience of:

  • • Initial crisis stabilisation and implementing workable scheme deferral agreements where  required;
  • • A collaborative approach to developing consensual restructuring solutions between the scheme, the Employer and wider stakeholders;
  • • Direct involvement with Regulated Apportionment Arrangements (“RAAs”) and Company’ Voluntary Arrangements (“CVAs”);
  • • Facilitating pre packaged sale of business and assets out of administration requiring scheme support; and
  • • Contingency planning to protect members in the event of employer insolvency.

The pensions and restructuring landscape continues to evolve with the PPF increasingly providing guidance to assist those exploring restructuring options. The link below takes you to the relevant page of the PPF website with helpful information and guidance notes.

https://www.pensionprotectionfund.org.uk/Pages/insolvency-practitioners.aspx

If you want to discuss a potential transaction or restructuring situation which could impact on your pension scheme, get in touch with our team who would be delighted to share their experiences with you from similar situations.

Terminations

Dalriada is one of five specialist firms that are members of the Pension Protection Fund’s (PPF) Trustee Advisory Panel (TAP).  The PPF created the TAP in order to help streamline the process (known as a ‘PPF assessment period’) that a pension scheme goes through once an employer insolvency event has occurred. This also helps to achieve a consistently high standard of work in order to provide certainty for members of such pension schemes which remains at the heart of what we do: our main duty as Trustee being to look after the interests of members.

Following notification of the employer insolvency, the PPF will confirm whether the Scheme is eligible for entry in to the PPF. Once confirmed and validated, a PPF assessment period commences. The start date of the PPF assessment period is triggered by the insolvency event and so will be backdated to the date of the employer insolvency. During the PPF assessment period, the PPF will confirm whether the Scheme has sufficient assets to secure members benefits above PPF compensation levels or if not, the Scheme will be transferred in to the PPF who will then assume responsibility for running of the Scheme.

Until any such transfer in to the PPF, the Scheme will remain in the PPF assessment period with the Trustee from the TAP retaining responsibility for management of the Scheme and guiding the Scheme through PPF assessment period. A PPF assessment period is typically up to 2 years following the initial employer insolvency.   

We have worked with the PPF since it was established in 2005 and transferred the very first pension scheme to the PPF in 2006. Our team has extensive experience in this area work having worked with over 200 pension schemes during an assessment period.

Our expertise also extends to pension schemes which have sufficient assets to secure member benefits, over and above what the PPF would pay, with an insurance provider.

Member Information

If you are member of a pension scheme which is currently in an assessment period and need further information about your own circumstances, please do call us using the contact details provided below and we will be happy to help.

Contingency Planning

We are also utilising our experience to help schemes identify areas of risk and put in place appropriate contingency plans depending upon the strength of their employer.

We would be delighted to talk to you if you would like to know more about contingency planning and how this might help you.

About the PPF

The PPF was set up in April 2005 to protect members if their employer or former employer becomes insolvent and the scheme can no longer afford to pay their promised pension.  The PPF’s purpose is to provide benefits to members of eligible schemes where there are insufficient assets to provide members with pension benefits at PPF Compensation levels. Compensation is a level of pension that the PPF provide to members and is payable from the start of the assessment period.

You can find out how the PPF calculates its payments, which are called compensation payments, at https://www.pensionprotectionfund.org.uk. As an overview, if you are over the Scheme’s normal pension age, whether or not you have started taking your pension, you will get the same amount as you get from the scheme. If you are under the scheme’s normal pension age, whether or not you have started taking your pension, you will receive approximately 90% of the pension you would have received from the scheme.

There is more detail about the PPF and the levels of Compensation that are payable on the website. For example, the following link will direct you to a helpful leaflet which provides further details about the PPF alongside several examples which show how you may be affected:

https://www.pensionprotectionfund.org.uk/DocumentLibrary/Documents/what_is_the_ppf.pdf

We deliver a specialised service

Providing advice to employers in distressed situations is a very specialised area and, as each case is different, there is no ‘one size fits all’ solution. However, we have a tried and tested consulting process that we have found to be of significant value. This dovetails with any advice you may be receiving from other parties such as legal advisers and covenant assessors.

Why Dalriada?

Committed – All Dalriada representatives are engaged on a fully employed basis in acting as professional pension scheme trustees. We are not, for example, lawyers or actuaries who are engaged part-time in the role of trustee.

Professional – Your Trustee Representative is professionally qualified and highly experienced, assisted by a number of support staff who are either professionally qualified themselves or studying for professional qualifications.

Experienced – We act as trustee to a wide variety of clients, encompassing different employer and scheme sizes, in a range of different situations.

Pragmatic – We work with fellow trustees, employers and other parties in a practical, collaborative and pro-active way to achieve fair solutions and outcomes that are in the best interest for all parties.

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