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If you are thinking of buying or
selling a company, it is vital that the pension plan(s)
be properly assessed and evaluated.
During a merger or acquisition, there are several aspects
of a company's pension plan that need to be considered.
| 1 |
The financial
status of the plan. Although the pension plan is
a separate entity from the company, it may have
a significant financial impact on the underlying
value of the company. |
| 2 |
It is important that the
powers vested in the trustees and in the company
through the trust deed and rules are fully evaluated
and understood. In addition, a due diligence exercise
should be conducted on behalf of the purchaser to
ascertain the pension promises made to employees.
Sometimes these promises may not even be documented
- instead they have become an established custom. |
To assess these two aspects, it is essential that this
process is conducted by an impartial body, so that you
receive independent advice.
Willis Ireland helps ensure that:
- The pension aspects of the proposed
deal are explored
- The purchaser evaluates the financial
status of the pension plans within the company
- The purchaser is fully aware of
any future commitment to funding these pension arrangements
- A pension schedule of the
purchase and sale agreement is drafted, in conjunction
with company lawyers, to protect the purchaser as
much as possible from any potential pitfalls in relation
to the pension plans
With planning and good advice, you can ensure that
your merger or acquisition is smooth, with no unexpected
surprises from existing pension plans.
For further information on pension planning please
contact us
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