Case Study

Challenging Corporate Sale

Our client, the sponsoring employer of a final salary scheme, wanted to pass the entire liability for the scheme to another company within the same group, to enable the shares of the sponsoring employer to be sold without any attaching pension liabilities.

We advised the client through the myriad of complex pension legislation which resulted in the trustees approving the proposed substitution of the principal employer and put in place an apportionment arrangement. On completion employees of the company being sold ceased to be active members and a section 75 debt of £1 was triggered in respect of the company. This was duly paid, discharging the employer from any further section 75 debt. Clearance was obtained from The Pensions Regulator in respect of the transaction.