Pensions - Articles - Future pension changes expected to impact corporate activity


Vicky Mullins, Senior Consultant at XPS Pensions Group, examines the future pension changes expected to impact corporate activity

 2019 will see a number of proposals on new rules for defined benefit (DB) pension schemes, many of which will impact corporate activity (sales, refinancing and restructuring), such as:
  
 1. A new funding code is expected to set a minimum approach – potentially both funding targets and cash payment periods.
 2. Employers will need to notify The Pensions Regulator (TPR) of a material business sale or granting security on a debt. For these new and certain existing notifiable events, a statement (Declaration of Intent) must be provided to help trustees understand the impact on the scheme.
  
 3. Individuals will face new civil penalties and criminal sanctions for wilful or reckless behaviour.
 Civil penalties could cost offenders up to £1m
 Criminal sanctions could result in unlimited fines and/or up to 7 years’ imprisonment.
  
 4. Early assessment of pensions in corporate activity which will help activity proceed if all parties (company, investors and lenders) work together on mitigation options.
  
 It may be a few years before the expected proposals in 2019 become law, but it is likely that trustees will already be reflecting these in their behaviour. Three key steps can help a scheme develop a clear approach in terms of corporate activity:
 • Set a strategy with a long-term objective for the pension scheme reflecting the impact of corporate activity.
 • Plan how to get there – what combination of cash, investment return and member options is needed?
 • Consider contingent support as backing to the approach taken.
  

Back to Index


Similar News to this Story

94 percent view State Pension as an entitlement not benefit
Majority of adults aged 66+ say that Triple Lock is affordable and fair to older generations. Around one in seven rely on the State Pension to provide
Fair play off the pitch
Male players in the English Premier League earn an average of more than £3 million per year, while their female counterparts average around £47,000. T
Why Bitcoin matters to Pension Schemes
Back in November 2024, Cartwright Pension Trusts announced its role in facilitating the first-ever UK DB pension trust investment in Bitcoin. With the

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.