Pension Scheme Deficits

Practical Solutions

Edited by Steven Hull

Publication date:

01 September 2007

Length of book:

273 pages

Publisher

Globe Law and Business

Dimensions:

240x160mm
6x10"

ISBN-13: 9781905783083

Pension scheme deficits are rarely out of the headlines. Never in their history have they enjoyed their current notoriety, nor has their importance been more apparent. Over 10,000 pension schemes provide pension benefits that are designed to replace a proportion of the recipient's salary when they retire. These schemes are the flagship of the occupational pensions system – and the vast majority are in deficit, some severely. This book is designed to take the reader through how this has come about and what is being done to rectify it. The book includes contributions from leading practitioners in their field, who are grappling with the often highly complex issues that deficits produce on a day-to-day basis, in an accessible and understandable format. Featuring practical analysis on a wide range of issues – from traditional methods of addressing a deficit, alternative methods of funding deficit reduction, investment and employment considerations to the Pensions Regulator and the Pension Protection Fund, the emergence of an alternative buyout market and corporate governance – this book will provide you with the only comprehensive guide to dealing with pension scheme deficits in your practice. Aimed at a broad cross-section of the pensions market, this book will be of great practical use to all who have to deal with a pension fund deficit. Trustees, corporate officers and stakeholders, from chief financial officers and finance directors to pension managers, and the entire range of advisers – accounting, actuarial and legal – will find the book of interest and practical use.

Preface 5 Steven Hull Ashurst Part 1: History Why are schemes in deficit? 7 Jonathan Seres Sacker & Partners LLP Traditional methods of assessing and dealing with a deficit 19 Stephen Yeo Watson Wyatt Part 2: Alternative methods of deficit reduction Scheme benefit changes 35 Camilla Barry Macfarlanes Career average revalued earnings and other alternatives to final salary 45 Danny Tsang K&L Gates Defined contribution schemes 55 Gary Smith Watson Wyatt Transfers with cash incentives 65 Ian Gault Susanne Wilkins Herbert Smith LLP Escrow accounts 75 Mark Alexander Julian Jones Lane Clark & Peacock LLP Other types of contingent asset 87 Mark Catchpole Stephenson Harwood Sectionalised schemes 97 Penny Cogher Speechly Bircham LLP Part 3: Investment revisited Asset allocation: the drive to bonds 105 Daniel Peters Aon Consulting Part 4: Practical considerations The legal position of employers and trustees 125 Diane Preston Trowers & Hamlins Employment considerations: consultation and discrimination 137 Sally Ling GR Comunications Issues in implementation: communications 147 Sally Ling GR Comunications Part 5: The impact of the Pensions Act 2004 The Pensions Regulator and the Pension Protection Fund 157 Andrew Powell Frances Phillips Taft Hammonds Moving a scheme into the Pension Protection Fund 179 Russell Agius Hewitt Associates The effect of the Pensions Regulator on M&A activity 189 Paul Jagger Hewitt Associates Part 6: Alternative buy-out market The emergence of an alternative buy-out market 197 Kenneth Donaldson Higham Dunnett Shaw plc Part 7: Corporate and scheme governance Directors’ duties and conflicts of interest 211 Däna Burstow Allen & Overy LLP The developing role of independent trustees 219 David Archer Pitmans Trustees Limited Part 8: Deficit reductions around the world Canada 229 Mark Newton Heenan Blaikie LLP Germany 239 Christoph Crisolli Kliemt & Vollstädt Ireland 245 Fiona Thornton LK Shields Solicitors United States 251 Robert P Flanagan Mary K Samsa Seyfarth Shaw LLP Part 9: Outlook Future developments 261 Kevin Wesbroom Hewitt Associates About the authors 267

"This is an excellent resource that will both broaden the reader's perspective and help to develop a better understanding of the UK situation."