3 minute read 11 Feb 2020

The Pensions Bill is set to bring major change to UK restructurings

Authors

Alan Hudson

EY UK&I Restructuring Leader

Hands-on restructuring professional who thrives on leading and supporting clients through challenging times. Husband. Proud father. Lover of dachshunds and all sport – watching, no longer playing.

Karina Brookes

EY UK&I Pensions Strategy Partner

Dynamic and approachable covenant advisor with a restructuring background, focused on achieving balanced outcomes for multiple stakeholders. Co-founder of Women in Pensions network.

Jane Evans

EY UK&I Pensions Strategy Associate Partner

UK defined benefit pensions. Passionate about the role of diversity, inclusiveness and sustainability in long-term value creation.

3 minute read 11 Feb 2020
Related topics Restructuring

The Pensions Bill is set to bring major change to UK restructurings

The Pensions Bill is back on the Government’s agenda and our Restructuring and Pensions Covenant teams are well-equipped to advise on what this means for corporate restructurings

The Pensions Bill is expected to become law in early 2021.  It is largely unchanged from last autumn’s draft (see our previous summary provided to trustees and sponsors) – but are you focused on how you should be changing behaviours now? The Bill will give the UK Pensions Regulator stronger powers both to seek remedial action and to punish stakeholders (including companies, lenders and their advisors, under current wording) who act (or fail to act) in the interests of UK pension scheme members. This will affect all restructuring situations with a UK DB Scheme and is likely to change the behaviours of corporates, lenders, advisors and trustees.

As our Profit Warnings report showed, there is still a lot of turmoil in a number of sectors.  Common restructuring activities like sale & leasebacks and additional temporary secured facilities are potentially caught under the proposals in the new Bill. Previous pensions acts have applied tests retrospectively, so we think it is worth factoring in now to avoid the robust investigation and potential new criminal penalties that may be coming down the line when the Bill comes into law.

A reminder of the most significant and relevant impacts to restructuring events proposed by the Bill:

  • Enhanced powers to tackle “irresponsible management” of pension schemes and against those who “recklessly risk” peoples’ pensions benefits’, allowing the Pensions Regulator to act more quickly and forcefully
  • New criminal offences with up to seven years’ prison and civil penalties up to £1m
  • Greater power to access information from employers on a timely basis to support enforcement activity

Our Restructuring and Pensions Covenant Advisory teams work closely on restructuring situations. Please get in contact if you would like to know more.

Are you paying sufficient attention to the pension scheme creditor in your restructuring?

Summary

The EY Restructuring team and EY Pension Covenant Advisory team are well-equipped to give joined up and balanced advice on the implications of the new Pensions Bill for corporate restructurings.

About this article

Authors

Alan Hudson

EY UK&I Restructuring Leader

Hands-on restructuring professional who thrives on leading and supporting clients through challenging times. Husband. Proud father. Lover of dachshunds and all sport – watching, no longer playing.

Karina Brookes

EY UK&I Pensions Strategy Partner

Dynamic and approachable covenant advisor with a restructuring background, focused on achieving balanced outcomes for multiple stakeholders. Co-founder of Women in Pensions network.

Jane Evans

EY UK&I Pensions Strategy Associate Partner

UK defined benefit pensions. Passionate about the role of diversity, inclusiveness and sustainability in long-term value creation.

Related topics Restructuring