Managing change, distress and winding up

Restructuring and Insolvency

In any insolvent or distressed situation, a defined benefit pension scheme becomes a very large creditor (often the largest).  Although usually unsecured, the ‘moral hazard’ powers of the Pensions Regulator make it an important party to any restructuring process.


Employers, trustees, insolvency practitioners and creditors need to understand the complex law around pensions and insolvency. ARC Partner Rosalind Connor covers many of these complexities in her Practitioners Guide to Pensions and Corporate Insolvency.

The team at ARC Pensions Law have been advising on restructuring since before the present regime was introduced in 2005, and have since advised on a large number of leading transactions.  We advise on matters including:

  • preparing proposals from the employer to the trustees, the Regulator and the PPF and managing the process effectively
  • advising trustees where the employer is in distressed or insolvent circumstances, dealing with their changing obligations and issues
  • working with lenders to protect their position in distressed circumstances where the PPF or trustees of a pension scheme are involved, and
  • advising insolvency practitioners on the pensions law and practice relating to their appointments.
Case study: Hoover Limited


Partners Anne-Marie Winton and Rosalind Connor advised Hoover Limited on its pensions restructuring through a rarely used legal process called a Regulated Apportionment Arrangement. Under the RAA, Hoover was released from around £500m of pensions liabilities and the continued employment of 500 employees was secured. The deal was approved by The Pensions Regulator, Pension Protection Fund and scheme trustees. It was the first of only two RAAs agreed in 2017; the other related to British Steel Pension Scheme.


The Hoover RAA negotiations involved another first, as the Pensions Regulator ordered a “skilled person’s report” on affordability of contributions in an attempt to break the funding deadlock between the trustee and the company. For more information see the Section 89 Report issued by The Pensions Regulator here. A spokesman for the Pensions Regulator stated: “We do not agree to these types of arrangements lightly but in this case we believe it is the right outcome for scheme members and the PPF.”

“ARC provided comprehensive and effective advice and support on a matter of significant importance and complexity. The team at ARC not only conveyed the requirements and operation of the law on pensions but also understood the dynamics of the business and its operations as well as the needs, interest and constraints of the other stakeholders – instilling confidence in the directors and senior managers of the Company. An important and effective partner throughout this demanding process.”

Abs Bokhari, Director, Hoover Limited
Anne-Marie Winton comments in Actuarial Post on the joint inquiry into Carillion’s collapse

On 30th January, the joint Business, Energy and Industrial Strategy Committee and Work and Pensions Committee heard evidence from two of the Carillion pension scheme trustees, one of whom was only very recently appointed. They explained the difficult position faced by trustees who are generally powerless to force a company to pay money into a pension scheme - unlike The Pensions Regulator....

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