Listen to Rosalind Connor and Nick Moser discuss the law and practical issues that arise in pensions and insolvency
There are some important developments in pensions and insolvency notably the Supreme Court decision pending in Bloom v The Pensions Regulator
which focuses on the Regulator's rights where it issues its notice after the commencement of the administration of the recipient.
At the same time, the Regulator continues to assess its ability to impose its powers in the UK and overseas following the decision in Sea Containers Limited. At the same time, its contribution notice in relation to the Bonas Group Pension Scheme was settled at a much reduced figure out of court, following some significant criticism of its approach in Michel van der Wiele v the Pensions Regulator 2011
. All of this happens in the context of the English common law's position on the enforcement of foreign judgments having been further refined by the Supreme Court's October 2012 decision in Rubin v Eurofinance
Against this background Pensions and Corporate Insolvency: A Practitioner's Guide
sets out to explain law and practical issues that arise in pensions and insolvency. It covers the pensions law and institutions, powers of the regulators and the establishment of the PFF, sets out the process for preparing for an insolvency including financial assessment, negotiating with the parties involved and competing interests, how to structure the insolvency in terms of moving the liabilities away from the operating company and explains how to handle the assessment and PFF entry. There is also coverage on avoiding negotiation and the regulator risks. Other areas covered include solvent restructuring and international issues relating to exporting the Regulator's powers.
The purpose of the book is to set out the laws and practices relating to pensions within the context of insolvency. It will start with a brief summary of the issues, followed by details of the process to be followed, tactical and structuring issues relating to the various forms of insolvency, restructuring options and the regulatory bodies. The effect on an international group will also be covered.
Over recent years, pensions and insolvency have become inextricably linked. As pension costs have risen and deficits become a significant financial burden on business, companies with pension schemes have become increasingly more at risk of acute financial distress.
The last twenty years of pensions legislation, designed to provide appropriate protection and avoid the more spectacular pensions scandals, such as Maxwell and (internationally) Enron, has left employers with little or no room to restructure pensions obligations. Soaring costs have combined with complex legislation to bring pensions to the front of any restructuring discussion.
Insolvency and restructuring experts have come to understand pensions and their framework, their trusts, funding assessments and endless pages of government regulations. Pensions experts have begun to learn about restructuring, understanding cashflows and issues of wrongful trading. However, both areas of expertise are immense and the industry continues to suffer from experts in one area who lack understanding of the other, leading to confusion, uncertainty and, sometimes, the reality of a little knowledge being a dangerous thing.
The purpose of this book is to give a general grounding in both areas and where they overlap, explaining in detail the complexities that are relevant in the pensions/insolvency environment, and explaining the issues and problems that arise in practice. It is hoped that practitioners in the field can benefit from the clear understanding of the legalities and the practice in this growing area of work.
This book would never have been possible without the assistance of many others. Most notable amongst those is Nick Tinker of Zolfo Cooper, who assisted greatly, not only in drafting and reviewing several chapters, but also kept the authors coordinated and enthused. Also, Stephanie Creed of Taylor Wessing, who organised, proofread, and gently nagged to ensure that deadlines were met. Other valuable assistance came from Emily Goodridge at Zolfo Cooper, and Angela Sharma and Ian Malone in the Taylor Wessing pensions team.
On a more personal level, it should also be admitted that chapter 2 would never have been written if the junior members of the Connor household had not kept their promise to play quietly in the other room whilst a first draft was put together. From the Moser perspective, the most thanks go to Tracey, Molly and Noah who put up with increased ‘Dad working time’ without complaint (and the inconvenience of the PC being hogged) and also thanks to the members of the Monday Night Club for their enduring support and inspiration.
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