The pension battleground

In February, a poll of more than 250 trustees of company final salary pension schemes found that 72% would be concerned at the prospect of being acquired by a buyout house. Trustees were concerned that a private equity sponsor would weaken the covenant thst commits an employer to finance the pension scheme. Recent proposals drawn up by the Department of Work and Pensions to give the Pensions Regulator greater power to force employers to inject more funds into company pension schemes post takeover should therefore be welcome news to trustees. By removing the need to prove that an employer acted intentionally to leave a pension deficit unfunded, the regulations could hamper the ability of private equity to restructure balance sheets of portfolio companies via a refinancing or debt issuance