Our client, the trustee of a defined benefit pension scheme with assets of c£100m experienced a transaction where one sponsoring employer’s business was being sold to an external third party, with the proceeds being passed to the wider group through intra-group arrangements.

We helped the trustee determine: (i) the impact of the transaction on the strength of the employer covenant; and (ii) appropriate mitigation for the impact.

The strategic advice provided throughout this process helped the trustee reach an agreement that resulted in materially increased contributions and a guarantee from a senior trading entity within the group.

Our advice to the trustee with respect to a recent subsequent transaction resulted in the trustee and the sponsor agreeing to discuss a journey plan to buy-out for the scheme over the medium term.