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M&A deals ‘bypassing Pensions Regulator’

UK - Some companies involved in M&A deals are bypassing applying for clearance from the Pensions Regulator due to concerns about the value of the process, according to a senior executive at actuarial and consulting firm Lane Clark & Peacock.

Speaking at a seminar on ‘Hot Topics in Pensions’, LCP mergers and acquisitions head David Lane told journalists there is an increasing trend for firms to press ahead without seeking clearance, which is a voluntary process.

“We are now seeing a trend where some companies involved in transactions are thinking: ‘Is this worthwhile?’”

Lane also noted that, with the Regulator due to oversee scheme funding valuations under the Pensions Act 2004, there will be increased demand on the Regulator’s pension resources and the body may have “difficulty keeping up”.

While the voluntary clearance procedure should take 48 hours, it can sometimes take several weeks, said Lane.

Lane also warned that overly opportunistic trustees could scupper takeover deals in their bid to secure better funding for the scheme.

“There is a danger if trustees adopt extreme positions,” said Lane, explaining that this could deter current and future interested buyers.

The Pensions Regulator did not respond to requests for comment.

In other news, LCP has appointed Gavin Orpin of Barclays Capital as partner within its investment team. This is a new appointment.

Orpin was associate director in the investment bank’s UK pensions team. Before this, he was a principal at specialist investment consultancy PSolve.

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