Surety pension bonds
We are internationally recognised experts in surety pension bonds. In 2016 we established the Pension Bond Association (PBA) shortly after acting on the first surety pension bond entered into by a UK pension scheme.
The purpose of the PBA is to promote knowledge and understanding of this Type C PPF recognised contingent asset. We regularly contribute to industry events and support sureties, pension scheme sponsors and trustees when introducing pension bonds into UK defined benefit funding regimes.
The PBA has also consulted with the Pension Protection Fund, most recently when updating its Type C contingent asset guidance, the Pensions Regulator and other interested parties as part of Gateley’s ongoing commitment to give back to the markets who it is our privilege to serve.
The variety of scenarios in which we have found a pension bond to be of assistance continues to expand. For example a pension bond can be used in the following circumstances:
- to provide a more efficient means of giving ongoing security to a pension scheme, perhaps enabling other assets to be released from an ongoing securitisation package.
- that enhanced efficiency can be used to acquire market share by using the released assets to finance important strategic acquisitions – this can be transformational.
- to protect key individual’s reputations where a relatively small DB scheme is hidden in the woodwork of a historic corporate structure.
- to replace or enhance impaired commercial property values currently used in contingent asset arrangements.
- to repair temporarily challenged sponsor covenant values as a result of the pandemic.
- to a wider variety of schemes than in the early days back in 2016 – we are seeing bonds considered as a matter of routine now in the £100m plus range.
We continue to support industry exploration of surety pension bonds and are on the cutting edge of this exciting and specialist area.