Pension Protection Fund

Defined benefit pension arrangements in the UK may not be immune to cross-class cramdown powers under a Part 26A restructuring plan.

By Shaun M. Thompson, Hafza Hussein, Paul R. Lawrence, and Tim Bennett

As the UK looks set to enter a new restructuring cycle, the question remains whether a restructuring plan (RP) could be used to cram down defined benefit (DB) pension liabilities in the face of opposition from UK pension plan trustees and in light of the new and wide-ranging criminal offences introduced by the Pension Schemes Act 2021. The UK Pensions Regulator (TPR) has a statutory duty to reduce the risk of DB plans entering the Pension Protection Fund (PPF), which is the UK’s “lifeboat” arrangement for DB plans whose sponsoring employers have become insolvent.