Pensions Advisory

Advising owners on efficient value extraction

Working with clients to manage impact on pension scheme

Background

The owner-managers of a company with a defined benefit pension scheme were looking to extract value, and had received advice from their personal advisers on tax efficient options.

The business was a specialist high-security printing company and had experienced significant demand in recent years, due to increased regulations in the banking sector where its key customers operated. The owners were aware of the potential adverse impact on the pension scheme of extracting value, and wanted assistance to understand and manage the situation.

Action

FRP’s Pensions Advisory team was appointed and carried out multi-phase advisory engagement to assess the impact of the various value extraction options, and how the impact on the pension scheme could be best managed. We provided advice on the structuring of a proposal to the pension scheme, which would allow a management buyout without adversely impacting the scheme.

Outcome

We advised that there were potential conflict of interest issues and suggested that an independent trustee was appointed.

Having completed our assessment of the options we assisted with complex, iterative negotiations with the new independent trustee, resulting in a package that was agreeable to the stakeholders. This package included cash, increased future contributions and security.

We assisted with complex negotiations resulting in a package that was mutually satisfactory to the stakeholders. Gerald Smith Pensions Advisory

Related team

Gerald Smith

Gerald Smith

  • Partner
  • Pensions Advisory
  • Birmingham

Gemma Jones

Gemma Jones

  • Director
  • Restructuring Advisory
  • Birmingham