Getting your scheme documentation in good order

Raf Shergold says organised scheme deeds and documents will look attractive to insurers

clock • 3 min read
Raf Shergold is managing director of Pendragon
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Raf Shergold is managing director of Pendragon

Ensuring that your scheme documentation is in good order should be a given but when approaching buyout it is an absolute necessity.

The first examination should be to consider where the deeds are and how they are stored. Are there a lot of old printouts, an archive of Word documents or maybe boxes of original deeds (or a combination of all these)? If so, this will need to be resolved at some point in the buyout journey and the sooner the better. Handing over a glut of unorganised material to the law firm as the scheme ends its buyout journey is certainly far from ideal and could lead to greater expense!

The scheme should preferably be providing a single source of content in an electronically-managed environment with a powerful search tool. Deeds and wider scheme documentation (of which there will normally be an awful lot) should be cross-linked, amendments and historical versions easily recognised and links to definitions made clearly obvious. In addition, the functionality of the environment should be intuitive and one which the lawyers are familiar with.

The benefits of organised documentation

If having easily accessible documentation is achievable at an early stage in the buyout journey, then the following becomes possible:

  • The scheme's deeds and other documentation now look attractive to the insurers involved in any future transaction. With demand exceeding market capacity, schemes must make sure they are an attractive and problem-free proposition to transact with - this might be looked upon as "The Dating Game".
  • Once the scheme documentation is on a credible, powerful and reliable platform, it's far easier to identify issues which need to be resolved at the earliest point. If they can be, there will be a far better buyout experience.

If the scheme has managed to identify and address as many issues as possible and has its scheme documentation in the best possible order, it should be much more of an attractive proposition to go to buyout, maximising the chances of a quick and smooth transaction.

Ultimately, every scheme wants to have as low a transaction fee as possible, so not having any major issues hidden away in the deeds will reduce the cost of the transaction, potentially resulting in a huge overall saving. In addition, avoiding having any exclusions imposed on the employer is critically important so schemes must do everything they can to achieve these two objectives. After all, buy-out is one of the most important processes an employer ever goes through!

Pendragon provides a solution to all these issues through its legal and regulatory service, Perspective. Having dealt with scheme deeds for over 20 years, the expertise accumulated within Pendragon's team can give the security that employers and trustees need to help contribute to a successful buyout. In addition, virtually every law firm and most brokers and insurers use Perspective, so it is a service they are already familiar with and ready to use.

If you are looking for a smoother path to buyout, Perspective is a hugely powerful and useful tool. It offers a single solution which can be used at multiple points in the buyout journey to ensure employers and trustees can achieve their desired result.

Raf Shergold is managing director of Pendragon

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