Financial sector reform

It is essential that trustees of financial sector pension schemes understand the implications of upcoming reforms.

The financial crisis that began in 2007 resulted in a drive to make the financial sector safer through greater regulation. There are a number of reforms that have been implemented as a result, both on a national and European level, that have implications for financial sector pension schemes.

How we can help

Sackers has been at the forefront identifying issues that may impact on bank and building society pension schemes as a result of the banking reform legislation.   The key issues arising include depositor preference, bail-in and the restructuring of both sponsor banks and pension schemes as part of ring-fencing.

We play an active part in both the Banking Reform Forum, a forum comprising the chairs of trustees of the large UK bank pension schemes and the Pensions Working Group, an industry working group comprising the members of the Banking Reform Forum, representatives from sponsor banks, HM Treasury, the Pensions Regulator and the Prudential Regulation Authority.  These groups meet to highlight and discuss issues arising out of the banking reform legislation that impact on bank pension schemes.

As part of the Banking Reform Forum, we successfully lobbied the EU Parliament to secure the inclusion in the introductory wording of the EU Recovery and Resolution Directive that liabilities of a failing bank to its pension scheme should not be subject to bail-in other than where such liabilities relate to pensionable bonuses of material risk takers or bonuses that do not arise as a result of a collective bargaining agreement.  This has now been transcribed into UK law.

We also successfully lobbied the Government in relation to aspects of the banking reform legislation while still in draft.

Our years of experience in advising trustees of financial sector pension schemes, combined with our particular focus on pensions in the context of financial sector reform and our membership of the key working groups, mean that we have a unique understanding of the issues faced by trustees and can offer pragmatic, commercially focused advice. This is backed up where needed with hands-on involvement in discussions with Government and regulatory bodies.

Recent experience

  • Advising the trustees of major bank and building society pension schemes on the implications of the Final Report of the Independent Commission on Banking (the Vickers’ Report), the Banking Reform White Paper, the Financial Services (Banking Reform) Bill, the Financial Services (Banking Reform) Act and related Regulations and the EU Recovery and Resolution Directive
  • Drafting submissions to the Government and EU Parliament on the legislation referred to above
  • Attending meetings of the Banking Reform Forum and Pensions Working Group