Manfred Hack, LL.M.
Lawyer
Pension Buy-out
Strengthening the Balance Sheet through Permanent Transfer of Pension Liabilities
In today’s dynamic economy, many companies face the challenge of effectively managing their pension obligations. Pension liabilities from direct commitments carry unpredictable risks that can affect not only the financial stability but also the strategic planning of the company. These risks arise from the unpredictable developments in market interest rates, inflation, and biometric factors such as the increasing life expectancy of beneficiaries. A proven de-risking strategy that can help companies address these challenges is the permanent transfer of pension obligations – also known as pension buy-out or pension run-off.
Benefits of a pension buy-out
The decision to pursue a pension buy-out offers a variety of advantages that can contribute to improving a company's financial situation:
Risik Minimization
Reduction of financial uncertainties through transfer of pension liabilities
Security in Planning
Clear calculation of pension costs; focus on core business.
Strengthening Financial Metrics
Improvement of equity ratio and increased attractiveness for shareholders and capital markets.
By opting for a pension buy-out, companies can significantly reduce their financial risks. This strategy enables companies to focus specifically on their core business while transferring the responsibility for pension liabilities to a specialized service provider. Strengthening the balance sheet is another key benefit of this measure, as an improved equity ratio leads to increased attractiveness for shareholders and advantages in borrowing.
Benefit from our Expertise Throughout the Buy-out Process
To take advantage of the benefits of a pension buy-out, it is crucial to plan and execute the process carefully. We provide comprehensive support throughout the entire buy-out process:
Actuarial Support
In collaboration with our partner BDO AG Wirtschaftsprüfungsgesellschaft, we offer extensive assistance in analyzing your pension liabilities. Our services include, among others, the assessment of obligations, cash flow and forecast calculations, as well as actuarial consulting.
Deal Advisory
From due diligence to data and project management as well as negotiations, the experts of our partner BDO AG Wirtschaftsprüfungsgesellschaft support you as needed in all phases of the transaction to ensure a smooth and successful process.
Legal Advisory
We structure the transaction and accompany you throughout the entire transaction process from a legal and tax perspective, ensuring that all aspects of the transaction are transparent and that the transfer is executed in a legally secure manner.