Code Committee Implements Changes Regarding Pension Scheme Trustee Issues

On 5 July 2012, the Code Committee of the Takeover Panel consulted on various changes to the Takeover Code in relation to pension scheme trustee issues.

The consultation stemmed from various suggestions submitted to the Takeover Panel as part of the overall review of the Takeover Code prompted by the takeover of Cadbury plc by Kraft Foods Inc. Broadly, under the proposals the trustees of an offeree company's pension scheme would be granted similar rights to those currently enjoyed by employee representatives. As a result of the consultation phase, the Code Committee has limited the proposed reforms in several significant ways.

First, the changes to the Takeover Code apply only in respect of a funded pension scheme sponsored by the offeree company, or any of its subsidiaries, which provides benefits, some of which are on a defined benefit basis, and which has trustees (or, in the case of a non UK scheme, managers). It was felt that defined contribution pension