Pensions Law & Regulations for Inward Investors
Norton Rose Fulbright LLP
Life at the interface of investments in, and acquisitions of, UK corporate entities and the regulatory and governance issues surrounding occupational pension schemes can appear to be confusing and even hazardous even for the most experienced operators and investors. Not so for Lesley Browning, the Head of Pensions at our world-renowned firm Norton Rose Fulbright.
What we do
Our global pensions team regularly advises on the market’s most complex and high-profile deals, providing an integrated service which covers all aspects of pensions law. Our work includes advising on pension scheme mergers and establishing new pension arrangements, investment planning and regulation, long term funding and cash flow requirements, regulatory compliance and risks, tax impacts, data protection and data handling, and fiduciary duties.
We work with clients from a wide range of industries, in both the private and public sectors, including sponsoring employers, trustees and other fiduciaries, buyers, investors, lenders, insurers and retail pension providers.
Our lawyers provide pragmatic and cost-effective advice on all types of registered and unregistered pension arrangements, helping investors and clients negotiate the increasingly complex legal and regulatory requirements governing this area globally.
With offices across the globe, including in the world’s business centers, our lawyers are able to draw upon the experience of our other global practice teams, including employment and labor, tax and banking and finance to offer tailored advice to our clients’ individual needs and requirements.
We have guided our clients to successful outcomes for their pension responsibilities in a wide range of matters, including the following:
- Defined benefit arrangements
- Defined contribution and hybrid arrangements
- Dispute resolution and litigation
- International pensions
- Investigations by the UK Pensions Regulator
- Mergers, acquisitions and disposals involving pension schemes
- Pension plan documentation
- Regulatory issues
- Terminations and wind-ups
- Treatment of pension surplus and deficits
Why pension schemes matter to investors in the UK
An investor in a UK business needs to take particular care to understand which type of pension arrangement is provided in respect of the employees of a target investment. Obligations can range from the requirement to provide a minimum level of pension through to liability for historic pension arrangements.
Defined benefit pension schemes, in particular, can result in significant hidden costs and risk. Regulations require defined benefit pension schemes to be funded to a certain level. A scheme in deficit can result in significant cost to the sponsoring employer and consequently can affect the value of any investment.
Additionally, the UK Pensions Regulator has extensive powers to take action where it considers that any corporate activity might adversely affect the ability of an employer to fund its defined benefit pension scheme.
The increasing importance of the UK Pensions Regulator
The UK Pensions Regulator has the power to require a person that is (or has been) connected with a pension scheme employer to make a contribution to that employer’s pension scheme, up to the full amount of any deficit in the scheme. Failure to pay an amount due under a contribution notice could result in a criminal penalty of an unlimited fine or even a prison sentence of up to seven years, or a financial penalty of up to £1 million.
Anybody involved with the running of a defined benefit pension scheme or the operation of an employer (e.g. company director or investor) could also be caught by the two offences of ‘avoidance of an employer debt’ and ‘conduct risking accrued scheme benefits’ if they do not have a reasonable excuse for their actions. The UK Pensions Regulator can here also impose criminal and civil penalties for breaches.
Certain types of transactions must be notified in advance to the Regulator and there could be significant fines for a failure to do this.
We help our clients safely navigate the Regulator’s requirements and regularly deal direct on their behalf with the Regulator, to secure successful outcomes.
What our clients say about us
Lesley’s work, and that of her team, over the course of many years devoted to their clients has earned them accolades from peers and clients alike. Here are some of their comments set out in the prestigious law directories, Chambers UK and The Legal 500:
Clients say that our pensions team are “able to translate legal advice and opinions into meaningful and actionable information” and praise “the consistency in the team, which is as much a product of the firm’s culture as the individuals’ strengths.” Chambers & Partners, 2022
Lesley herself is praised for her “exceptional experience and knowledge” in The Legal 500 UK 2021. Chambers & Partners, 2021 noted “she really understands the area“, and that she is “very commercial and quick to come to a view.”
For more information about Lesley click on the link here.
For more information about our Pensions offering click on the link here.
To arrange a meeting with Lesley or one of her team, please contact Lesley in the first instance by emailing firstname.lastname@example.org or calling her on +44 (0)20 7444 2448.
For further advice and assistance please contact:
Norton Rose Fulbright LLP
3 More London Riverside
Tel: + 44 (0)20 7444 2448
020 7993 4255