UK - PricewaterhouseCoopers Legal (PWC Legal) has rocked the perception that trustees have the power to scupper potential deals and acquisitions.
Louise Inward, head of pensions at PWC Legal, rejected the notion because there was often no legal basis for it.
In practice, Inward said only a fraction of trustee boards had the power to insist on full funding at the time of a deal.
She explained: “The valuation of the pension liabilities in deals can become a contentious issue because of the potential variation in the assumptions used. Companies or buyers may view some trustees as recklessly prudent in their funding requirements, and in a hostile takeover situation a high funding requirement from the trustees will inevitably be perceived as a defensive tactic.”
Inward added that private equity investment was not necessarily a bad thing, and there had to be a balanced playing field.
Her comments came after trustees in the Alliance Boots pension scheme recently demanded approximately £1bn from its potential private equity owners to cover a shortfall.
The trustees are understood to be seeking as much as £500m in an upfront cash payment from Kohlberg Kravis Roberts and Stefano Pessina, the deputy chairman who are seeking to take the company private.
The government is in talks with the UK and Irish pensions regulators over how to protect members of cross-border schemes in the event of a no-deal Brexit.
The equalisation of guaranteed minimum pensions (GMPs) is at least two years away from being completed, and could take longer than four years for some schemes, a poll has found.
The Pensions Regulator will consider if schemes should be required to have professional trustees and assess the case for greater regulation of administrators and system providers, PP can reveal.
UK inflation fell from 2.3% to 2.1% in December, approaching its lowest rate for two years, according to the Office for National Statistics (ONS).