Pensions & Incentives

Our pensions experts fully appreciate the extra burden placed upon employers who are now expected to comply with auto-enrolment obligations for qualifying employees into pension arrangements. Complying with all the requirements can prove to be an arduous task. We are on hand to work with clients to help them identify qualifying employees and to review communications and contracts with providers including pensions and payroll. 

• Advised an international employee benefits consultancy on the redesign of its own salary sacrifice and automatic enrolment offerings.  

Our expert team work with our clients to ensure that a pension scheme is properly closed to new members, future service accrual, or completely wound up. The process of closing or winding up a scheme is a long process and we have the necessary expertise to advise on all aspects, from ensuring the process is followed legally to giving notice, reviewing communications with employees, following the consultation process, and through to preparing legal documents that give effect to the closure/wind-up and alerting the required authorities of the move.

• Managed several pension scheme closures to accrual of benefit without a requirement to maintain a final salary link to accrued benefits.
• Advised upon, and implemented, structures to manage pension debt liabilities, to ensure safe and managed wind-down and buyout of schemes.
• Found solutions to legacy issues of sex discrimination (Barber claims) to achieve scheme buyout and wind-up.
• Large defined benefit and defined contribution pension schemes, including master trusts, advising employers and trustees on ongoing scheme management, documentation, tax rules, Ombudsman complaints, regulatory intervention, funding issues, de-risking, winding up, surplus distribution and negotiations between parties.
• Principal adviser in respect of the winding-up of an insolvent bank’s defined benefit pension scheme (effecting the Isle of Man’s first insured buy-out for 20 years).
• Principal Isle of Man adviser on the solvent winding-up and buy-out of a number of banks and building societies.

Defined benefit pension schemes have inherent risks attached. We work with pension scheme trustees and company sponsors, to look at ways of removing these risks inherent through the likes of a bulk purchase annuity contract with an insurer (“buy-in”) which provides payments which closely match the scheme’s liabilities.

Our leading experts are fully aware of the importance of the pension aspect in relation to corporate transactions including mergers, acquisitions and TUPE transfers; and we are known to often advise clients on all issues that could arise. Our team regularly advises clients on pension related difficulties including when the target is involved in a benefit scheme with a funding deficit. We work closely with organisations to ensure that any issues are ironed out before finalising any commercial transaction.

• Advised one of the participating employers on a flexible apportionment arrangement in relation to the Heating and Ventilation Contractors’ Association Retirement Benefit Scheme.
• Principal adviser in respect of the winding-up of an insolvent bank’s defined benefit pension scheme (effecting the Isle of Man’s first insured buy-out for 20 years).
• Currently appointed as Isle of Man counsel for the trustee boards of the largest non-public-sector defined benefit schemes in the Isle of Man.
• Advising on various benefit changes projects, including the cessation of defined benefits accruals, introduction of various underpin and other transitional arrangements, and the introduction of career average plans.
• Advised the trustees of a Pension Fund of an insurance company on all legal issues. The challenges faced by trustees of defined benefits pension scheme are many and varied and legal advice is essential to help the trustees meet these challenges.
• Provided pension law support to a leading London law firm in a transaction relating to the sale of a property management company.
• Acted for merger of household name brewing and hospitality company in relation to their merger of works and staff pension schemes.
• Provided pensions support to a US client of in a proposed acquisition. The target has a defined benefits scheme which will become the responsibility of the US client after the acquisition.
• Provided pension law support to a worldwide law firm in a transaction relating to the sale of a global financial services firm’s traditional fund administrative services business to another financial services company.

Our leading experts are fully aware of the importance of the pension aspect in relation to corporate transactions including mergers, acquisitions, and TUPE transfers. We regularly advise on pension-related difficulties including when the target is involved in a benefit scheme with a funding deficit. We work closely with organisations to ensure that any issues are resolved before finalising any commercial transaction.

• Acted for merger of household name brewing and hospitality company in relation to their merger of works and staff pension schemes.
• Advised HMV on the pension aspects of the sale of Waterstones, which was dependent on the liabilities of the pension plan being left behind, and involving an apportionment arrangement and difficult negotiations with the banks, the pension trustees, and the buyer to agree a means to compromise the statutory employer debt due to the pension plan arising from the sale.

• Advised the sellers on the £7M sale of energy and power consultancy group Energy & Power Ltd to the German-owned Thyssen Krupp UK plc.
• Advised pension scheme trustees in relation to a corporate merger of a household name company, involving a change of pension scheme employer covenant and negotiation of a suitable funding agreement to ensure full funding without risk of building up a surplus in the scheme.
• Principal Isle of Man adviser in a multiple scheme and multi-jurisdictional merger that resulted in a £1 billion fund.
• Acted on numerous demergers by way of dividend in specie, reduction of capital and section 110 insolvency act schemes: These demergers typically required numerous stages and documents within each stage to fully complete the related demerger. This required an organised and systematic approach to the generation and finalisation of the documents and their completion.
• Provided pensions support to a US client of in a proposed acquisition. The target has a defined benefits scheme which will become the responsibility of the US client after the acquisition.
• Target MCG Ltd: Advised on the formation of this media and communications group and the simultaneous acquisition of three sets of companies (Cooler King Ltd and subsidiaries, OTM (UK) Ltd and White Label Productions Ltd) for a mixture of cash and shares. Drafted and negotiated the huge set of documents required, including all financial assistance paperwork, all banking documents and all shareholder arrangements going forward.
• Acted for pension scheme trustees to merge two schemes to present a better platform for eventual insurance company buyout.
• Provided pensions support to solicitors in relation to their gallery client. Issues arose from an outsourcing contract relating to the security staff of the gallery.
• Acted for pension scheme trustees to merge two schemes to present a better platform for eventual insurance company buyout.
• Worked on three consecutive transactions to consolidate pension schemes within a corporate group and facilitate effective use of surplus funds.

Even the most well-run pension schemes have disgruntled members or beneficiaries. Many of these disputes are caused by delays in providing certain information, incorrect benefit statements, payment of the wrong benefits, disagreement over whether an incapacity pension is payable or how lump sum death benefits should be distributed. These complaints often reach the Ombudsman. Our lawyers have extensive experience in defending clients successfully against Ombudsman claims by ensuring that their position is properly presented and the arguments supporting their actions are clearly put forward.

• Advised a global IT firm on the review and revision of its group life provision and the conclusion of separate complicated claims by members to the pensions ombudsman.

Our team of experts regularly draft and review documentation that set out the pension rights of employees. We work closely with our clients to fully comprehend their business to ensure that their benefits correlate and that all documentation, contracts, and handbooks are updated regularly to ensure any legislative changes have been considered.

• Advised upon multiple rewrites of governing scheme documentation and booklets.
• Drafted and established multiple international retirement benefit schemes.
• Advised the trustees of two specialist s.615 pension schemes for overseas employees, including the provision of regular legal updates.
• Advised employers, trustees and benefit consultancies upon the design and offer of pension options such as enhanced transfer values and pension increase exchanges.
• Assisted trustees in bulk transfer of DC assets and liabilities to insurance company master trusts.
• Resolved “Virgin Media” documentation questions raised by pension scheme trustees and by company auditors.
• Advised PZ Cussons’ pension schemes on all legal aspects of scheme governance and risk management.

Our specialist lawyers fully understand the difficulties that employers and trustees of pension arrangements face due to being regulated by the Pensions Regulator. We work in tandem with clients to ensure that they comply with the myriad of compliance and legislation requirements and help to minimise the effect of such regulation on the funding, investment, administration, and other aspects of their arrangements.

• Advised a religious body on regulatory compliance and fund investment associated with its provision and administration of an authorised pension scheme master trust .
• Advised a pension trustee board on the successful consolidation of its commercial master trust with Pensions Regulator approval.
• Counsel to various pension trustee boards and sponsoring employers on compliance with regulatory administrative and reporting requirements.
• Negotiated on behalf of trustee and sponsoring employers during pension scheme funding reviews overseen by the Pensions Regulator.
• Advised on a company’s withdrawal from an industry-wide pension plan for non-associated employers, which involved satisfying the Pensions Regulator regarding the treatment of the deficit and the protection of members remaining and transferring from the plan.

The termination of a contract and the subsequent drafting of a mutually beneficial comprise agreement is no easy feat. Our experts are aware that the pension aspect of these agreements is often contested, particularly when it affects a senior executive. We have vast experience in guiding clients through this process, to ensure the best outcome for our clients.

• Advised the trustees of another small pension scheme on the transfer of funds and establishment of new trusts after the death of the original member.

We advise employers, trustee boards, pension providers and administrators on the establishment and governance of SIPP and SSAS arrangements, and their compliance with FCA and HMRC rules.

• Advised SSAS sponsoring employers and trustees on their management of family-run schemes, funding arrangements, the resolution of internal conflicts of interest or other disputes, and the payment of death benefits.
• Advised a trustee board on matters heard before the High Court relating to the bankruptcy of a SSAS co-trustee and member and the consequences of a divorce settlement.
• Provided model trust and contract documentation and associated advice to administrators and insurers in connection with commercial SIPP and SSAS products and services.
• Advised on HMRC conditions and FCA regulations governing SIPP and SSAS investments.

With decades of experience advising clients on company share option plans (CSOPs), our lawyers understand both their drawbacks and their benefits. This expertise coupled with our excellent relationships built over many years with HMRC means that we are perfectly positioned to advise on all aspects of CSOPs.

• Spectrum Strategy Consultants Ltd: Formed a new holding company for this communications strategy company to buy out the shares of a departing founder. In the process, restructured the share capital and granted replacement share options.
• Advised a technology company on the establishment of a share option plan for employees in the UK, Europe and Asia.

Today’s political climate has led HMRC to be under more pressure than ever to be seen to be clamping down on organisations and individuals suspected of improperly handling their tax affairs and those advising them to do so. Our specialist lawyers have significant experience in defending clients on matters such as employee shares and PAYE issues, and regularly successfully represent clients in the Tax Tribunal.

• Advised two third-party medical benefits administrators on the design of their products, including tax rules, associated contractual revisions and customer materials.
• Provided practical legal support to numerous pension scheme trustees on their administrative and governance obligations under pensions and tax law.
• Advised a joint venture company on a long-term incentive plan that operated on a co-investment basis, linking the participants’ payout to the increase in the company’s value received by the founder shareholders, with the involvement of complex structuring issues as well as tax and regulatory issues.

Our lawyers work closely with a number of listed company clients including members of the FTSE 100. We have deep understanding of the special factors which apply to listed companies, including obtaining shareholder approval in accordance with UKLA rules and taking account of the guidelines issued by institutional shareholders. We also work closely with remuneration consultants, particularly in the key area of drafting performance conditions.

Our team of enterprise management incentives (EMI) experts understand the many difficulties that may arise when deciding whether a company qualifies for this incentive and the many technical requirements set out by the legislation. We are perfectly placed to advise our clients on all EMI matters, whether a start-up or a transatlantic company whose options are impacted by a takeover.

Incentivising staff is an important part of business management. We advise organisations on how to incentivise their employees through tax-efficient share schemes including share incentive plans, also known as SIPs, as well as bonus, SAYE, and other bespoke share schemes.

• Advised on the implementation of three new incentive plans involving a combination of deferred bonuses and phantom share awards with complex performance conditions.
• Advised a company on the establishment of a share incentive plan which operating in conjunction with an employee benefit trust.
• Advised a joint venture company on a long-term incentive plan that operated on a co-investment basis, linking the participants’ payout to the increase in the company’s value received by the founder shareholders, with the involvement of complex structuring issues as well as tax and regulatory issues.

By working in collaboration with our clients’ HR, finance and management teams and employee benefits consultant, an employee benefits lawyer is integral to the review and design of any new benefits arrangements. Advice to the business on its legal options and responsibilities when benefits are introduced or changed, the creation or assessment of a new benefit’s documents, all supported by a practical familiarity with those benefits and the providers who deliver them, make our experienced legal support a valuable element of a successfully delivered project.

• Advised multiple motor manufacturers, institutional and international investment banks, a search engine company, energy businesses, global law firms and accountancies, restaurant chains and utilities companies, and others, on the design and implementation of their medical benefit plans for employees.
• Providing bespoke trust documentation, rules, associated supporting literature and practical advice needed to create or amend group life or medical trusts and their trustee boards, to employer and product provider clients.
• Provided practical written guidance and supporting documentation to help life assurance scheme trustees exercise their discretionary power to pay lump sum benefits.
• Advised on the tax rules applying to HMRC-registered and excepted group life schemes, how inheritance tax affects them and the rules relating to HMRC notification.
• Advised on the incorporation of medical trust benefits into a wider employee benefits programme, compliance with HMRC rules, trustee governance, HMRC and ICO registration,
• Advised two life insurers on the design and delivery of value-added services (GP services, EAP, etc.) to employees of group cover corporate customers. Employee assistance programs (EAP) and healthcare add-ons.
• Advised two third-party medical benefits administrators on the design of their products, including tax rules, associated contractual revisions and customer materials.
• Advised on the inheritance tax constraints affecting non-employee benefit trusts and the extension of healthcare trusts to equity partners.