Amendments to Pensions Regulator’s anti avoidance powers go much further than mere buy outs says Mayer Brown
22 October 2008
22 October 2008 - The Government has, this week, introduced amendments to the Pensions Bill which extend the Pensions Regulator’s anti avoidance powers.
The Government said its main concern was the emergence of new alternatives to pensions buyouts – which it said could reduce the security provided by the employer responsible for the scheme.
Anna Rogers, head of pensions at Mayer Brown, said: “The introduction of the new ‘material detriment test’ is likely to have a significant impact on corporate activity in the UK where a final salary pension scheme is involved. Despite the Government's headline claim, the amendments are certainly not expressly limited to transactions involving non-insured buy-outs. Although the statutory defence is welcome, it will, in practice, be hard to make out. The proposed new legislation will mean that companies will need to obtain expert pension advice before engaging in many forms of corporate activity.”
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