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After much talk over the past 2 or 3 years, at last sovereign annuities have become a reality… nearly.  This week, I was one of the speakers at the launch of the first sovereign annuity approved by the Pensions Board.  Getting to this point is a major milestone in the long journey towards being able to use sovereign annuities. We are not quite there yet though.

One of the speakers at the launch was Anthony Linehan of the National Treasury Management Agency (NTMA). The view in the industry is that sovereign annuities are most likely to be backed by Irish sovereign bonds. Mr Linehan gave a very interesting presentation on the bonds which the State will issue to back sovereign annuities and the process for issuing and pricing those bonds.

It seems that the State will issue what are being called ‘amortising bonds’. These are bonds which will pay out equal annual payments which are made up of a coupon payment and part of the principal which would usually be repaid at the expiry of the bond.  They are ideally suited to sovereign annuities.


Continue Reading Sovereign Annuities – Nearly a Reality

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Pension issues can be a major factor influencing merger and acquisition activity.  Companies may pull out of deals due to uncertainty around pensions (especially uncertainty over the funding of defined benefit plans).  Pension plan deficits are now part of corporate life and how the deficit and the other pension issues will be dealt with needs to be considered early on in the deal. Outlined below are five pension issues we have seen arise in recent transactions and some solutions found to deal with them.
Continue Reading Five Key Irish Pension Issues in Corporate Transactions

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As more and more sponsors of defined benefit schemes are preparing to terminate contributions to their schemes or are going into receivership, examinership or liquidation, a question which keeps arising for trustees is whether or not they are under a duty to demand payment of the scheme’s deficit.

When trustees either know or have a justifiable belief that the sponsor of their defined benefit scheme is about to terminate its contribution liability or suffer an event of insolvency, our view is that the trustees need to take immediate action. The first thing they need to do is to look at the scheme’s employer contribution rule and the winding-up provisions and see what powers they have.  Only then can they decide what to do. 


Continue Reading Trustee contribution demands: is there a duty to make them?

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The continuing economic crisis sees those with responsibility for pension schemes faced with a number of complex issues. There are a number of core issues which we are seeing consistently arise. These include the following:

  1. Check the Power of Amendment
  2. Check Employment Contracts
  3. Check the Effect of the Change
  4. Conflict, Confidentiality and Consultation
  5. Obtain Advice


Continue Reading Managing Occupational Pension Schemes in Crisis: 5 things to Consider