Pension schemes can form a critical part of any corporate transaction.  It is therefore very important for companies to get clear, concise advice from an experienced and pragmatic viewpoint.

At Hymans Robertson we recognise that not all potential transactions reach completion, so we adopt a four stage process designed to answer the relevant questions at each step. 

1. It is important to get an early “heads up” on whether pensions will be critical to the transaction:

• do the trustees have particular powers, for example to demand increased cash contributions?
• are the historical levels of cash and/or expense appropriate?
• what is the updated financial position of the arrangements?
• how significant is the target’s pension deficit in the context of its assets or earnings?

 2. Once more detailed information is available, the next stage is to consider:

• what pricing solutions can be contemplated?
• have any liabilities been understated?
• how likely is it that (for example) the cash contributions will increase to an extent that would critically affect financial headroom?
• what future cost control measures might be implemented?
• what issues might arise from pensions as a result of your plans for the business?

3. Of course, other parties are involved in a transaction – we therefore assist with:

• negotiations with the other party and/or scheme trustees
• consideration of merits of seeking “clearance”, and negotiation with Pensions Regulator

4. When the deal is done, the pension scheme still needs to be managed.  We can assist with:

• set up of new arrangements
• design, communication and implementation of changes to employee benefits
• assistance with changing scheme investment strategy to manage risks
• assistance with developing a potential exit strategy

Our approach does not stop once the deal completes – ongoing management is important to ensure the pension scheme works as efficiently as possible for the company.