Correspondence: Jason Coates, Wragge & Co LLP, 3 Waterhouse Square, 142 Holborn, London EC1N 2SW, UK. E-mail: Jason_Coates@wragge.com; www.wragge.com/newscentre

¹is a partner in Wragge & Co's LLP pension team. He advises trustees, corporates and industry bodies on all aspects of pensions law. This includes giving strategic advice in relation to significant events for their pension schemes such as corporate restructuring, scheme mergers and buy-out transactions. Jason also sits on the Legislative Parliamentary sub-committee of the Association of Pension Lawyers, which reviews all new pension-related legislation.

²joined the pensions team as a solicitor at Wragge & Co upon qualification in September 2007. She is a member of the Association of Pension Lawyers. Amy advises both companies and trustee boards on a broad range of pensions issues relating predominantly to defined benefit schemes, including day-to-day scheme advice, scheme documentation and scheme buy-outs.

Received 22 January 2009; Revised 22 January 2009.

Abstract

This paper considers the buy-out process from the perspective of trustees of UK occupational pension schemes. It considers the decisions faced by trustees and the legal factors that trustees need to consider before and during the buy-out process. Proceeding with a buy-out policy to secure all or part of the pension benefits is often a one-off decision for trustees so they must get it right. Practical tips are offered to assist with the smooth running of a buy-out transaction, which is often complex. The key lies in (1) good preparation and project management and (2) a good network of advisers to provide support and advice along the way. The global financial downturn and its impact on the UK pensions buy-out market cannot be ignored. The financial downturn has, to some degree, put the pensions buy-out market on hold in the United Kingdom. However, once the markets stabilise, we expect insurance-based pensions solutions in the United Kingdom to come back to the fore.