The Pension Protection Fund has published updated general guidance on insolvency and the assessment period. This guidance is intended to help Insolvency Practitioners (IPs) to understand what they should do if a DB scheme employer suffers an insolvency event and their role and responsibilities during an assessment period.
Key points and actions for IPs
The guidance confirms a number of key points, including:
- When and how IPs should notify the PPF, the Pensions Regulator and scheme trustees of an insolvency event;
- How IPs can use a dedicated online service to help them to do this;
- What the PPF will do after it receives notice of an insolvency event;
- What IPs should do after they have given notice of an insolvency event (guidance relating to notices of scheme failure, withdrawal or ceasing to act);
- How the PPF scheme delivery team and Restructuring & Insolvency case manager can assist them;
- How IPs should support the appointment of a specialist panel trustee to a pension scheme;
- Changes to pension scheme creditor rights during an assessment period (with the rights being held by the PPF during assessment, rather than the trustees);
- To whom IPs should send documents and notices relating to the insolvency;
- What IPs should do with any sums recovered from the employer and any enquiries from employees or pensioners; and
- How the PPF will approach the different types of insolvency proceedings (and professional fees), and what it expects from IPs.
In January 2019, the PPF also published and or updated a number of other guidance notes relevant to restructuring and insolvency. These relate to:
- 'The PPF's legal standing and approach to the governance of insolvency proceedings';
- 'Insolvency Practitioner remuneration';
- 'Pre-packaged administrations';
- 'Potential legal actions contemplated by insolvency practitioners';
- 'Company Voluntary Arrangements';
- 'How PPF drift arises and should be addressed'; and
- 'Appointment of independent Trustees'.
All of these guidance notes are available on the PPF's website.
Osborne Clarke comment
The updated guidance note on insolvency and the assessment period recognises the important role played by the IP, both at the time that a sponsoring employer suffers an insolvency event, and in the period that follows. It also confirms what the PPF expects from IPs, from the moment an insolvency event occurs onwards. Both this and the other guidance notes listed above, are essential reading for IPs and useful guides for pension scheme trustees.
If you would like further advice on anything covered in this update, please contact our PPF specialists Jonathan Hazlett or Joe Webster, whose contact details are below.
Osborne Clarke is a member of the PPF’s Legal Panel providing legal advice in all areas to the PPF and specialist pensions law advice jointly to the PPF and trustees of schemes which have entered a PPF assessment period.
Additionally, Open Trustees Limited, a sister company to Osborne Clarke and a member of the PPF’s Trustee Advisory Panel, is appointed by the PPF to act as trustee of schemes which have entered a PPF assessment period. Open Trustees is also on the Regulator’s list of approved trustees. If you would like any further information on Open Trustees or would like to consider them for an appointment please contact the Managing Director, Jonathan Hazlett, using the details below.