We work with clients to put security assets in place to reduce the contributions employers have to pay in.
Often employers are forced to put more and more money into pensions schemes, with little chance of getting it back even if the scheme moves into surplus or starts to wind up.
Many employers pay deficit reduction contributions but due to a number of factors, from actuarial assumptions to changes in legislation, deficits often seem as though they never reduce.
Providing security assets may be an alternative to putting extra cash into the scheme. For example, granting a charge over a business premises or a parent company gives the scheme something to draw on if the worst happens and the employer can no longer meet its obligations.
The documents involved in this process have to be carefully drafted and agreed to ensure they reduce the scheme’s liabilities (including potentially changing the assumptions on which the scheme calculates liabilities) and achieving the desired effect can be difficult without specialist guidance.
We are experienced in handling these exercises and our expert lawyers have an understanding of the issues and motivations at play so they can help find a solution that benefits everyone including the members of pension schemes.
