Corporate Pension Financing

Over thirty years experience has enabled Leveraged & Equity Investment to fully understand that timely, professional and individual service is vital when it comes to financing and investment of unusual structures and markets.

With economic uncertainty, regular changes to accounting methodology and standards, market volatility and longevity issues it is vital that sponsor companies have the ability to alleviate the problems pension schemes can have on their balance sheet and profit and loss.

Responding to these issues Leveraged & Equity Investment has developed pension solution structures that transform the affect pension schemes have on sponsor balance sheets and profit and loss accounts.

PENSION COST CERTAINTY - BULK ANNUITY TODAY - MEDIUM TERM PAYMENT

Leveraged & Equity Investment has created a unique structure following full consultation with bulk annuity providers and pension scheme consultants.

The unique structure is provided using a model that replicates pension servicing cost accounting, but provides the benefits immediately. It enables sponsors to close their scheme via the bulk annuity process immediately, whatever the scheme deficit. *

Ordinarily sponsors would need to make additional contributions until they had completely removed any scheme deficit to buy out liability levels. This could take several years and would leave the sponsor open to all the usual risks and uncertainties. Furthermore, they would not be able to fix prices or structures until the deficit was removed.

 

Following consultation with bulk annuity providers, actuarial and corporate pension consultants; Leveraged & Equity Investment has created a unique*** structure.

Leveraged & Equity Investment have utilised their years of financial structuring knowledge to enable this solution. Sponsors can completely remove the scheme from their balance sheet and profit and loss, even if in deficit or currently underfunding, immediately.The issues of deferred premiums removed in a low capital cost environment, potentially over longer terms.**

We work with all providers and consultants, or we can introduce sponsors to our regular pension consultants, investment bank and bulk annuity provider.

 

Click on the link here to download our basic Buy Out Brochure.

For further information please see our Contact page or email bulk@leaseinvestment.com.

SCHEME DEFICIT ELIMINATED - REPAYMENT OVER YEARS

Our deficit elimination scheme is designed for sponsors who are currently facing the issues of defined benefit deficits.

IAS19, s179, IFRIC 14 in the United Kingdom and other rules can cause major financial problems.

Our scheme deficit elimination structures are unique*** and bespoke, but adhere to a core principle, economic benefit to the sponsor and pension scheme.

There are of course methods of reducing scheme deficits. Issuing new equity, vanilla debt, quasi equity and partnerships to name a few. As a generalisation, these solutions do not remove the liability overall, they just replace it with another. They do not increase the sponsor Net Asset Value.

 

See out latest post Brexit views on defined benefit deficits and how to eliminate them immediately.

Click on the link below.

 

 

 

 

 

 

 

 

 

 

The Leveraged & Equity Investment solution is different.

Most importantly it clears the deficit immediately, but does not replace the deficit with another liability. The Leveraged & Equity Investment structure offers potential tax advantages, does not appear on the balance sheet *, has complete flexibility and adapts to the sponsor business cycle.

We believe the structure offers a range of other benefits, and again the structure has been discussed in depth with pensions consultants, accountants and lawyers at the highest level.

As with Bulk Annuity financing we work with all advisors, trustees and providers. Alternatively, we can introduce sponsors to our regular pension consultants, investment bank and investment manager.

The benefits to both sponsor and scheme Trustees are difficult to explain in a scenario such as a webpage.

A brief explanatory leaflet is available to download below, alternatively for a confidential initial discussion please email pensions@leaseinvestment.com or view our Contact page,

*Meets both current and proposed rulings under accounting regulations including, but not limited to, IFRS9, IAS37, IAS 17,IAS16 and IFRS3.

FINANCING OF DEFINED BENEFIT SCHEMES IN MERGERS & ACQUISITION (M&A)

Ordinarily, as outlined above, corporate pension schemes can be a source of concern and de-valuation to a company balance sheet and cashflow,causing issues for prospective purchasers or private equity investors.

Now Leveraged & Equity Investment can enable financing for private equity, investors and buy outs of target companies that operate corporate pension schemes.

What has traditionally been seen as a difficulty could be a source of finance or enable the offer of a higher purchase or investment price. Just calculate the benefits of removing a non-earning liability from the valuation you place on a prospect or target.

Can we explain this accurately and in a concise professional manner on a webpage? No!

We strongly believe these solutions are under utilised in acquisition or dispersal thinking.

Find out if we can possibly assist, email acquisition@leaseinvestment.com with the most basic details you are happy to supply, please include your email, telephone number and website address.

 

 

 

 

 

* Solutions from £5 million to £500 million, or equivalent in approved currencies and domiciles.

** Terms up to 25 years are available. Typical term 15 - 20 years.

 

*** Patents pending