Pensions Regulator: the Telent determination

Increasingly, corporates have been searching for ways to manage their pension liabilities to reduce funding deficits or to remove risk from their balance sheets. This has led to an expansion in the buy-out market involving insurance-based solutions and the creation of new solutions where an employer's business is acquired with its pension liabilities which are then separated.

The Regulator's Determination Panel has issued a determination in relation to a case involving the acquisition of an employer. It relates to the proposed takeover of Telent plc by Pension Corporation (PC). Telent (formerly Marconi) sponsors the GEC 1972 Plan (the scheme). The scheme's trustees were concerned that, once the takeover had completed, PC would wish to appoint trustees to the scheme and that these trustees would have conflicts of interest which could not be managed.

The existing trustees approached the Regulator to exercise its power to appoint independent trustees. The Regulator appointed three independent trustees. The Determination Panel, which is required to review the initial decision, has published reasons for its decision to confirm the appointment of three independent trustees.

Here is an in-depth analysis of the determination.