A consultation on proposed changes has been published by The Takeover Panel. The changes would affect the Takeover Code by forcing companies launching takeovers to disclose plans for the pension scheme. These proposals make sure that the Takeover Code extends to those retired from the company and other beneficiaries of the pension scheme.
The Code, which relates to all employees of a target company, would also apply to trustees of the scheme. However, this does not mean that pensioners or trustees can give their opinions on anything to do with the takeover or pension scheme if the acquisition goes through.
The Code Committee has stated that if the proposals are implemented they would attempt to create a framework within which an offer must be made on the company pension scheme. This could comprise of either a defined contribution or defined benefit or both and may become a point of discussion when the offer is made.
The company which is being taken over would have the right to express their views on any offer made. This should enable any relevant parties to discuss offers on pension schemes to discuss the changes at an early stage. Therefore, any possible issues which may arise as a consequence of the takeover could be discussed by shareholders.
NAPF (National Association of Pension Funds) director of policy, Darren Philp, welcomes the changes. He went on to say that he is in agreement with the panel that powers relating to the employees should extend to company pension scheme trustees.
He believes that if the proposals are implemented trustees would be able to get a lot more information relevant to the pension scheme. This means that relevant questions can be asked so that the trustees feel they can better serve those in the pension scheme.