Corporate activity and transactions

Understanding how corporate transactions impact DB schemes

Defined benefit (DB) pension schemes can be a bit of a mystery in a transaction situation, particularly for purchasers who do not have DB arrangements of their own. Given the potential significance, it is vital to get thorough pensions due diligence done at the time to assess the risks that the scheme brings to the table and the impact this will have on the value of the deal.

Any corporate activity with the potential to be ‘materially detrimental’ to the ability of a DB scheme to meet its liabilities can lead to the Pensions Regulator (TPR) exercising their anti-avoidance powers. Knowing the inherent risks and how to manage them is essential.

Our experienced  DB pension consultancy team  offers a fresh approach to providing pensions advice around events and in transaction situations. Our specialist pensions professionals also have a deep understanding of employer objectives and the wider business environment in which organisations operate, giving you confidence when making decisions.

We have considerable experience in advising on ‘clearance’ and dealing with TPR. We also provide clear and concise vendor or purchaser due diligence services which will vary depending on the needs of the two parties. 

We're alert to potentially 'hidden' liabilities and provide clear communications on complex pensions issues to provide clients with sound and pragmatic advice. 

Recent work in this area includes:

• Due diligence advice to a major overseas multinational company considering the acquisition of a FTSE 100 company with significant DB pension obligations in the UK
• Due diligence advice to lending parties in respect of a UK client carrying out a significant debt refinancing exercise

We're well placed to help with:

• Due diligence advice on the pensions aspects of any transaction
• Pension risk assessments of proposed corporate activity, including liaison with TPR where appropriate
• Funding support and risk management post-transaction
• Advice on pensions strategy for transactions involving distressed companies