Lawyers give support to pension’s disclosure
June 7th, 2011 | 
Author: Specialist pension lawyers have welcomed proposals suggesting that companies who are looking to purchase a UK public firm should be compelled to reveal their pension plans before they go into business, in spite of the fact that it could throw up problems with regards to making deals
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The United Kingdom’s Takeover Panel have been open to ideas over the past few months on ways it could make the rule governing corporate mergers and acquisitions more productive, this comes in the wake of US food group Kraft’s takeover of UK chocolate company Cadbury. The consultation closed last week and have now announced that chairmen of trustees for the Law Debenture Trust Corporation, David Gee, had contacted the Panel calling for more public disclosure, according to a story by the Financial Times.
Company lawyers in advisory roles with prominent companies were positive about the proposals following the announcement this week. Partner in Pensions law at Silverman Sherliker, Jennie Kreser, was enthusiastic about the effort for change, but questioned its timing, saying; ‘I don’t think it’s unrealistic. In a sense this happens already – it just happens too late from the trustee’s perspective. Companies already guided towards seeking ‘clearance’ from the Pensions Regulator on M&A deal, but this voluntary, and often takes a significant amount of time.’
Ms Kreser went on to say that the proposal would offer a ‘definite consideration of all pension-scheme members, rather than just the current employees.’ She added that it could only be a positive move where the members are concerned, but commented that ‘companies making a bid might not agree.’
Head of pensions law practice at Mayer Brown, Philippa James, said that the proposal was something that occurred informally, and; ‘it looks like this proposal would just codify it and turn it into a formal requirement.’
Partner with M&A, Stephanie Bates, echoed these sentiments, pointing out that it was a sensible offer. ‘For any bidder approaching any UK public company with a substantial defined-benefit, or final-salary pension scheme, the scheme will be high on its list of area to focus on already.’
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