Govt considers regulating pre-packed admin sales

The government is considering introducing regulations regarding pre-packaged administration sales, amid fears they could be abused to pass on pension liabilities to the Pension Protection Fund (PPF).

In a written question response, MP for Rochester and Strood, Kelly Tolhurst, stated that the government is “aware of concerns” over the transparency of pre-packed administration sales.

She revealed that the government is currently evaluating whether legislative measures are required to regulate pre-packaged sales to a connected person.

The government is particularly concerned about instances where a business is sold to a person connected with the old company.

It has previously liaised with the PPF on pre-packed administration sales, which made clear that it did not “fundamentally take issue” with pre-packs.

However, concerns that do arise in relation to the sales will be referred to The Pensions Regulator for investigation.

A pre-packed administration sale is where the sale of all or part of a business is arranged before the existing company entered formal insolvency and realised on or immediately after the appointment of the administrator.

Tolhurst said that it is “a valuable business rescue tool” as they “help to avoid a deterioration of the value of the company’s business between appointment of the administrator and sale”.

She continued: “This means there is more money available for creditors, including the pension scheme.

“In most cases where pre-packs are used, the only alternative would be the collapse of the business and the loss of all employees’ jobs.”

    Share Story:

Recent Stories


Responsible investing
Laura Blows speaks to Standard Life head of investment solutions, Gareth Trainor, about the latest responsible investment trends and developments for providers, pension schemes and their members

ESG and member engagement
Laura Blows speaks to Legal &General Investment Management head of DC, Emma Douglas, and Nest Insight Director of Research and Innovation, Jo Phillips, about member attitudes towards ESG and how this may impact upon pension fund investments

Sovereign bonds and climate change considerations
In Pensions Age's latest podcast, Laura Blows is joined by Hilary Norris, Product Manager, Sustainable Investment, EMEA, FTSE Russell, to discuss sovereign bonds and climate change considerations

Climate Investing
Laura Blows speaks to Aled Jones, Head of Sustainable Investing for Europe at FTSE Russell, and Adam Matthews, Director of Ethics and Engagement for the Church of England Pensions Board, about the role of climate investing within a pension fund portfolio.

Managing volatility
In the latest Pensions Age podcast, Laura Blows speaks to Cambridge Associates head of European pension practice, Alex Koriath, about the Covid-related market volatility and how pension funds can prepare for the challenges ahead

Advertisement