United Kingdom: Regulator Issues Contribution Notice Against Belgian Firm

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Employer Action Code: Monitor

The U.K. Pensions Regulator has issued a contribution notice ordering a Belgian company to pay £5 million into a U.K. pension plan.

Key Details

The contribution notice, which requires a Belgian company to pay £5 million to its U.K. subsidiary, is the first to be issued by the Regulator using its powers under the Pensions Act 2004.

The Regulator can use its anti-avoidance powers against a company that has been a party to an act or omission designed to avoid a plan’s liabilities. The Regulator found that the Belgian parent company had retained the subsidiary while avoiding the pension liability by placing the subsidiary into a pre-pack insolvency. (Under a pre-pack, an insolvency practitioner is appointed to find a buyer for the business and agree to terms before the company is placed in bankruptcy, enabling the sale to be completed immediately afterward). The Regulator further found that the parent company had not engaged openly with the pension plan trustees or the Regulator. The parent company has appealed the decision.