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:
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Benefit changes via scheme rule amendment
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Pre-agreed approach to future valuations
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Withdrawal of employer and apportionment request
In return the trustees would receive:
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Parent company guarantee
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Series of enhanced deficit funding payments
Role
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Act for the trustees and analyse the covenant for the valuation
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Assess the impact of the withdrawal of the employer on the covenant and advise whether the trustees could and should agree to the apportionment
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Consider the covenant enhancement offered by the support guarantee
Results
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Worked closely with the trustees’ actuarial and legal advisers to suggest amendments to the employer’s proposal
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Concluded that the withdrawal of the employer would not have a detrimental effect on the covenant
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Trustees were able to agree to the company’s amended proposal resulting in an enhanced covenant and funding plan
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