Queen’s Speech airline insolvency and pensions announcements, R3 response

Duncan Swift, President of insolvency and restructuring trade body R3, comments on plans to reform airline insolvencies and the management of private pension schemes, which were announced in yesterday’s Queen’s Speech:

Airline insolvency reform

“We sympathise with the Government’s wish to ‘keep the fleet flying’, but the feedback from our members is that this idea just isn’t practical: insolvency practitioners may be unwilling to take the risk of adopting this approach. There will be concerns over creditor attempts to impound planes overseas, risks to crew and passenger safety, insurance costs, and the question of how to pay for everything. Insolvency practitioners will be personally liable if anything goes wrong, too. It’s a superficially attractive option, but it’s a potentially redundant reform.”

Pension reform

“As part of its work on pensions reforms over the last year or so, the Government promised to consult stakeholders on how to make it easier to restructure pension schemes at companies facing serious financial difficulties. This consultation hasn’t happened yet, but it’s vital changes are made. The inability to restructure a pension scheme early can make it harder to rescue businesses and lead to worse outcomes for a scheme, its members, and, ultimately, the Pension Protection Fund. It would be really disappointing if restructuring reform was absent from a future pensions Bill.”