Since the introduction of The Pension Schemes Act 2021 (PSA 21) we are seeing greater oversight and scrutiny over scheme governance and corporate activity.
Events that are likely to adversely affect or materially reduce the financial resources of a business supporting a defined benefit pension scheme (DB Scheme) need to be considered like never before. These include:
- Sale of a group company or part of its business
- Transferring a material part of the balance sheet to another group entity
- Changing the intra-group debt structure
- Raising additional finance ranking ahead of a DB Scheme
- Payment of material dividends, special dividends or share buybacks
- Strategic changes in direction
How can we help?
PSA 21 adds to an already broad set of regulatory powers. To avoid scrutiny and sanctions, company directors and trustees need to demonstrate that they have taken the right steps to:
- incorporate PSA 21 considerations into their governance;
- understand the impact of corporate activity on the ability of business to fund their DB Schemes; and
- agree mitigations as necessary.
There is no single approach to managing risks arising out of PSA 21. We offer bespoke solutions for clients.
This includes training, governance reviews, and specific legal, actuarial and covenant advice in relation to matters which may attract regulatory scrutiny. As well as support with Regulatory and stakeholder engagement.
Our approach allows us to support clients in navigating this new regime in a commercial, pragmatic and cost effective way.
What we do?
We understand the importance of educating our clients on the implications of PSA 21, providing training in what PSA 21 is and how it affects corporate clients and trustees.
A robust governance framework is key to ensuring that PSA 21 is embedded into all corporate decision-making. We have developed governance frameworks and tools to support our clients in reviewing and updating their governance procedures and to help trustees understand the impact of the new regime on their sponsors.
We support clients by carrying out legal and financial analysis to assess the expected impact of activity and support in developing and implementing a strategy for managing this.
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