M&A Pension Due Diligence

  • A] Occupational Pension Plan Obligations

    An occupational pension plan has many long-term legal, financial, tax and risk aspects.

    It seems advisable to be aware of all aspects and preferably beforehand. Especially as they tend to change in time due to among others new (inter)national legislation.

  • B] First: Check All Existing Obligations

    Before looking at the future and which scenario might be most attractive for your company, it seems advisable to first check if all existing obligations until now have been met by the company and the participants.

    This aspect might seem overly cautious but it is not. Too often we have seen that not all obligations have been met. Which resulted in costly corrections.

  • C] M&A Issues

    If your company is interested to acquire or merge with another company, we can provide the required groundwork by drafting a Pension Due Diligence. If requested also on short notice.

    It will i.e. answer the following questions:

    • Will there be any legal mandatory Branch Pension Fund participation? The correct answer to this question prevents complex and costly correction procedures later on.
    • What are the currently existing and in the near future expected valid occupational pension plans, related coverages and deferred employee benefits?
    • What is the extent of the annual company costs pre/after tax for the next 10 years?
    • Are there financial benefits in a new situation compared to the current situation?
    • Which additional risks might be caused by which new situation?
    • Which options are there to make sure that the new situation combines the lowest possible company pension costs with the desired fine coverages for the employees?
    • As the pension scenario options depend on the proposed overal set-up of the new situation, it seems advisable to include the Pension Due Diligence at the start of the process and not at the end.
  • D] Implementation

    We can assist your company with providing the required expertise:

    • Provide an English Pension Memorandum which includes detailed answers to the mentioned questions combined with a relative brief conclusion and recommendation.
    • Assist your company during the negotiations in order to correctly specify and formalize additional risks and financial exposure in the best possible manner.
    • To inform and educate all related company committees and employees.
    • If required assist you with a collective transfer of value or provide a desired new collective pension plan and related coverages.
  • E] Communications

    Pensions are a difficult topic for many persons involved. Correct communications prevent substantial legal and financial issues later on. Its relevance is therefore not to be underestimated. Especially as in general a new pension claim can only be legal if the employee has accepted it.

    Thus we always provide a tailor-made Communication Plan during the project.

  • F] Conclusion

    Looking at the relevance of a Pension Due Diligence and at the substantial costs it can prevent, it is our opinion that it does not ‘cost’ but rather saves substantial capital.

  • G] Contact

    As M&A issues are often urgent, feel free to contact our Director Patrick Donders directly: