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Restructuring guidance

In rare cases we can take part in the restructuring or rescue of an insolvent business. 

We will take part in restructuring if it means the return from the employer will be better than if the business had been simply left to fail.

It usually involves removing the pension debt from the company, allowing it to continue to trade with a positive cash flow and potentially make a profit. 

Moratoriums and restructuring plans

The Corporate Insolvency and Governance Act 2020 (“CIGA”) requires engagement with us and The Pensions Regulator (TPR) where an eligible pension scheme employer is involved in a moratorium or a restructuring plan,

To send relevant notifications and documents to us, please email [email protected]. Please note: this email address should not be used to send s120 or s122 notices. Please use the links below to find out how to submit these:

To send them to TPR, please email [email protected].

When we’ll take part in restructuring

We can only take part in restructuring or rescue if the proposal meets specific criteria.

These principles are designed to make sure that the pension scheme is in a much better position than it would have been if we had done nothing. 

Our guidance booklet, Guidance on our approach to employer restructuring, provides detailed information on our principles along with an example of how we apply the criteria.

Standard documents for restructuring 

Among other requirements, as part of any restructuring, we’ll require cash and an equity stake to protect our own interests and the interests of the scheme.
We’ve prepared a suite of standard documentation to facilitate this. 

Any company or group of companies proposing a restructuring should be prepared to enter into these documents. If they’re not prepared to do so it will probably prevent a restructuring, so it’s important to highlight this as soon as possible.

Our strong preference is that mitigation should be provided in cash on or before the date of the restructuring becoming effective. In exceptional circumstances we may accept secured loan notes as part of the mitigation in addition to the cash.

Download our standard restructuring documents 

Shareholders' agreement

Sets out the relationship between the shareholders and how they’ll deal with each other.  Among other things it will govern any material changes to the business, e.g. borrowing, increases in salary/benefits and bonuses for the directors/senior management etc.

Download the shareholders' agreement

Articles of association

The new articles we require the company to adopt to provide us with the protection we require

Download the articles of association

Loan note agreement

In rare situations if it’s not possible for the proposer to pay all the cash required on completion, we may consider deferring with loan notes, usually when accompanied by supporting security and, where appropriate, an inter-creditor deed following the requirements in our guidance.

Download the loan note agreement

Security documents in support of loan notes 

Any deferred consideration should rank ahead of general creditors for repayment, which is achieved through taking this security; often in the form of a mortgage debenture.

Download security documents in support of loan notes

Inter-creditor agreement guidance 

Guidelines on what this should include. It will govern how the various creditors of the company will deal with each other, including giving notice of any enforcement action they’ll take.

Download inter-creditor agreement guidance