UK - The Pensions Regulator's powers look set to be tested after the Kohlberg Kravis Roberts-led takeover of Alliance Boots was backed by shareholders but without any agreement on filling the fund's deficit.
Trustees in the Alliance Boots pension scheme had reportedly demanded approximately £1bn from its potential private equity owners to cover a shortfall.
But during a shareholder meeting John Watson , chairman of the board of trustees of the Alliance Boots Pension Scheme, reportedly said the trustees felt the borrowings in excess of £8bn being taken on to finance the acquisition would have serious implications for the scheme.
The Pensions Regulator recently issued guidance urging trustees to seek clearance, which absolves them of personal liability in the event the employer later becomes insolvent, when corporate transactions pile on heavy new debts.
The KKR consortium reportedly said the group was not seeking a showdown with trustees and was working hard to achieve a constructive result.
Commenting on the regulator's position, Rosalind Connor, a senior associate at law firm Jones Day, said it had been suggested that clearance was the most appropriate option, yet this did not fit well with legislation.
Connor said: "It is strange of the regulator to imply they can issue notices where a transaction has been done at an arm's length. But that is not to say that it is a good idea to upset the regulator."
She added that the regulator has also tried to avoid showdowns with companies.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.