Overseas Employer

A DAX-listed German global industrial group presented its UK pension trustees with a funding and benefits package in advance of the triennial funding valuation, requesting the trustees’ consent to:

  • Benefit changes via scheme rule amendment
  • Pre-agreed approach to future valuations
  • Withdrawal of employer and apportionment request

In return the trustees would receive:

  • Parent company guarantee
  • Series of enhanced deficit funding payments

Role

  • Act for the trustees and analyse the covenant for the valuation
  • Assess the impact of the withdrawal of the employer on the covenant and advise whether the trustees could and should agree to the apportionment
  • Consider the covenant enhancement offered by the support guarantee

Results

  • Worked closely with the trustees’ actuarial and legal advisers to suggest amendments to the employer’s proposal
  • Concluded that the withdrawal of the employer would not have a detrimental effect on the covenant
  • Trustees were able to agree to the company’s amended proposal resulting in an enhanced covenant and funding plan

 


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