Pensions Regulator statement on financial support ... - Freshfields

TPR goes on to set out the following<strong>statement</strong>s of intention:• it would not deliberately delay the issue ofan FSD to take advantage of the postinsolvency‘super priority’ ranking;• it would not in most circumstances seekto object to an application byadministrators for a prospective order tovary the order of priority so as tosubordinate FSD liabilities behind theadministrator’s reasonable remuneration;and limit calls on the Pension ProtectionFund, we consider it likely, if not inevitable,that TPR will (perhaps gradually) shifttowards a position whereby it will look forincreased recovery for pension schemes.You can read TPR’s full <strong>statement</strong> in Financialsupport directions and insolvency.• it will consider any proposals to re-orderother categories of administration expenseabove FSD liabilities; and• the procedure it would follow where anFSD is issued during an administrationwould be exactly the same whether FSDliabilities rank as an expense of theadministration or a provable debt.TPR continues to encourages administratorsand other interested parties, such aslenders, to approach it early in an insolvencyprocess (or indeed before that processhas begun) to discuss any likely actionagainst the insolvent companies. Employersshould continue to utilise the legislativeclearance procedure.CommentTPR’s <strong>statement</strong> contains a lengthydisclaimer, which warns readers that itshould not be read as limiting TPR’sdiscretion in any particular case to takeaction that is appropriate in thecircumstances. Moreover, the <strong>statement</strong> isnot intended to cover TPR’s approach tocontribution notices.While it provides a helpful insight into TPR’sintentions in this area, we would adviseinsolvency practitioners and lenders tocontinue to exercise caution. Given TPR’sstatutory function to protect the benefits ofmembers of defined benefit pension schemesFreshfields Bruckhaus Deringer llp is a limited liability partnership registered in England and Wales with registered number OC334789. It is authorised and regulated by the Solicitors RegulationAuthority. For regulatory information please refer to www.freshfields.com/support/legalnotice. Any reference to a partner means a member, or a consultant or employee with equivalent standingand qualifications, of Freshfields Bruckhaus Deringer llp or any of its affiliated firms or entities. This material is for general information only and is not intended to provide legal advice.© Freshfields Bruckhaus Deringer llp, August 2012, 34066Freshfields Bruckhaus Deringer llp <strong>Pensions</strong> <strong>Regulator</strong> <strong>statement</strong> on financial support3directions and insolvencyAugust 2012

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