The pensions view

Author: | Published: 1 Apr 2007

"Dealing with the living dead" is how one party uncharitably described negotiating with UK pensions trustees. Whether one agrees or not, undoubtedly pensions trustees, The Pensions Regulator (TPR) and the Pension Protection Fund (the PPF) are now key players in restructurings. One of TPR's initial goals was that pension trustees should start acting like any large creditor, specifically like a bank. This article considers some of the solutions agreed by pension trustees to address pension problems in restructurings.

Why pensions are so important

It is worth revisiting why pensions have become so important, whereas in the last wave of restructurings five or six years ago, they were scarcely mentioned. (By way of background, we are only talking about defined benefit, or final salary, pension schemes. Defined contribution, or money purchase, schemes only pay out whatever the accumulated contributions allow and do not have deficits, save in unusual circumstances.)

Primarily the...