M&A / Restructuring
Spence & Partners has a proven track record in providing focussed, commercially valuable pensions advice on corporate transactions. Spence & Partners has particular expertise in the area of corporate restructuring, including disposals, acquisitions, buy-outs and buy-ins and has extensive experience of working with other professionals in both hostile and non-hostile situations.
Advice to potential purchasers is totally without vested interest; indeed on occasions our advice has resulted in the potential purchaser reconsidering or withdrawing from the deal.
To get the most out of our advice it is best to involve us at the early stages of negotiations, particularly if acquiring a business with the intention of providing substantially different benefits going forward. Appropriate treatment of pensions is essential for the implementation of a successful deal, given their growing importance to the financial status of companies as well as the increasing focus on pension benefits by employees and unions.
Restructuring creates specific issues with regard to pension schemes, especially defined benefit pension schemes. Typically, this will mean altering or even stopping the future provision of defined benefits and/or the introduction of alternative arrangements.
This creates a number of issues, not least:
- who retains responsibility for properly funding past service entitlements
- the nature of any ongoing provision
- what benefits are targeted and how this impacts on members’ expectations
- what benefits are to be provided for current employees on death in service.
The key to the success of any restructuring of pension benefits is effective communication both with members, particularly where benefits are being reduced going forward and also the trustees of any defined benefit scheme who will need to ensure that, even in the event of scheme closure, benefits built up to date are properly protected and funded for.
Spence & Partners have extensive experience of managing change and are expertly placed to advise on and manage the transition process.
