Deloitte and Eversheds Advise on New Canal & River Trust PFP
30 July 2012 (PLANSPONSOREurope.com) – Professional services firm Deloitte, the business advisory firm, and international law firm Eversheds, have advised charity the Canal & River Trust on a new pension funding partnership (PFP) aimed at enhancing the security of its members’ pensions.
This real estate asset-backed contribution formed part of a package of measures undertaken by Canal & River Trust.
The charity has taken over responsibility for 2,000 miles of canals and rivers in England and Wales. It takes over from British Waterways in a major transfer of public assets into the charitable sector. As part of this move, it has entered into a partnership with the trustee of Waterways Pension Scheme, which will own commercial real estate assets, providing secure income to the pension scheme trustee.
As part of a wider agreement to enhance the strength of the employer covenant in light of the transfer of the employer pension responsibilities to a body wholly independent of government, a PFP has been provided to the pension scheme. The use of the PFP structure enabled Canal & River Trust to provide additional funding and security to the scheme while preserving cash for charitable uses. Due to the charitable status there is no tax benefit from use of the PFP structure but it will deliver an attractive ongoing rate of return to the pension scheme while equally managing any risk of overfunding.