Hogan Lovells advises NAAFI Pension Fund Trustees on a Crown Guarantee

The Secretary of State for Defence has executed a Crown Guarantee in favour of the Trustees of the NAAFI Pension Fund (the "Trustees" and the "Fund"). Hogan Lovells advised the Trustees, a longstanding client, on this project.

The Fund's employer is the Navy, Army and Air Force Institutes ("NAAFI"), which was established in 1921 to provide services (principally catering and retail) to Crown Forces serving in the UK and overseas.  NAAFI personnel have played significant roles in the Second World War and British military operations since then, with over 500 NAAFI employees being killed in action. 

The c.£500million Fund provides pension benefits to just under 6,000 former NAAFI employees.  With the decline in NAAFI's operations as British Forces are withdrawn from overseas bases, the Fund faced a very uncertain future.

Following a number of years' negotiation, the Secretary of State for Defence has agreed to guarantee the Trustees' obligations to pay benefits to members and the Fund's expenses.  The guarantee gives members the highest level of security that all their benefits will be paid.

The Hogan Lovells team was led by Edward Brown (Partner) supported by Jim Davis (Senior Associate), and with specialist public-law input from Charles Brasted (Partner) and Julia Marlow (Counsel). 

Partner Edward Brown commented "Hogan Lovells has particular expertise in advising clients who have (or would like) a Crown Guarantee, and we are delighted to have been able to bring this experience to help the Trustees obtain such a good result for Fund members.  Obtaining this guarantee for the Fund is the culmination of many years' effort by all involved". 

Chair of the Trustees, Tony Hales CBE said:  "We are delighted with this outcome which not only removes any uncertainty or ambiguity in the security of our pension fund members interests - many of whom who have served their country in uniform overseas -  but in our view works in the interests of all parties. Hogan Lovells worked diligently and creatively to find solutions that worked for everyone, which was the key to success as far as I and my fellow Pension Fund Trustees were concerned".


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