Faith Dickson comments on the increased use of RAAs
The Pensions Regulator has agreed a regulated apportionment arrangement with Hoover, as experts say the number of RAAs, as well as the amount of due diligence involved, is likely to increase.
RAAs allow a company to offload its pension fund in order to avoid insolvency, but strict requirements have to be met. The mechanism is therefore seldom used, and so far the Pensions Regulator says it has approved RAAs in relation to 27 schemes.
The Hoover (1987) Pension Scheme, which has 7,782 members, had a buyout deficit of about £500m and a Pension Protection Fund deficit of approximately £300m in March 2016.
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