Does the Newly Effective United Kingdom Pensions Act Affect US Companies?
Yes. The United Kingdom Pensions Act, which became effective on April 5, 2005, establishes a PBGC-like entity referred to as the Pension Protection Fund. It will be run by a new Pensions Regulator with wide-reaching powers. Under the Pensions Act pension fund liabilities may extend not only to a company being acquired and its affiliates, but also in certain cases to its or their shareholders or the funds of private equity investors. Although unclear, it is our understanding that talks have taken place between the UK and US with respect to the possibility of enabling UK administrators to pursue pension claims under the new Pensions Act against US affiliates (and their shareholders and investors) of UK companies.
