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Pension challenges in bankruptcy and restructuring processes

This is an extract from Financier Worldwide's August online publication entitled "Pension challenges in bankruptcy and restructuring processes."

REFLECTING ON THE LAST FEW YEARS, HOW WOULD YOU DESCRIBE OVERALL PENSION CHALLENGES ARISING FOR COMPANIES FACING BANKRUPTCY / INSOLVENCY AND RESTRUCTURING PROCESS? WHAT MAJOR TRENDS HAVE DEFINED THIS SPACE?

United Kingdom, Employee Benefits & Pensions, Insolvency & Restructuring, Macfarlanes LLP, Defined benefit pension plan, The Pensions Regulator (UK), Pension Protection Fund
Defined benefit plan sponsors in bankruptcy have new flexibility to modify plan distributions

Tax-qualification requirements generally prohibit plan sponsors from eliminating optional methods of distribution under a retirement plan. This “anti-cutback” requirement is subject to only a limited number of exceptions. A recent modification to this rule adds a new exception for single-employer defined benefit plans maintained by employers in bankruptcy. Such employers may amend their plans to eliminate lump-sum distribution options if certain conditions are met.

The Anti-Cutback Rule

USA, Employee Benefits & Pensions, Insolvency & Restructuring, Tax, McGuireWoods LLP, Bankruptcy, Retirement, Subsidy, Defined benefit pension plan, Pension Benefit Guaranty Corporation