Mayer Brown Rowe & Maw has advised on a high-stakes restructuring of WH Smith's pension scheme.

The firm advised the retail chain's trustees on pension changes stemming from WH Smith's decision to demerge its business into two separately-quoted companies – news distribution and retail.

Instead of completely splitting the pension scheme at the same time, the trustees opted to use a change in the tax regime introduced in April that allows them keep a single scheme divided into two sections, with assets and liabilities separately valued and accounted for.

The old rules meant all employees participating in the same pension scheme had to belong to the same corporate group. As part of the shake-up the company also paid £50m into the scheme to help fund a deficit.

In 2004 the retailer's then £200m pension shortfall led to private equity house Permira abandoning its approach for the company, which has been making up the deficit since that point and which last year over-hauled the scheme to bring in a liability-driven investment approach.

Mayer Brown partner Andrew White advised the trustees, a long-term client of the firm, aided by assistant Beverly Cox.

White told Legal Week: "We were told to help the trustees in response to the proposals. They felt they should keep the one pension scheme as it would be in the interests of the members, so we did that.

"It is unusual because if the old regime had continued we would have had to agree that after a certain period they would separate into two schemes which would be more expensive to maintain."

Each part of the scheme will now be responsible for its own deficit and if someone were to decide to buy one of the two companies they would simply sponsor one of the two sections.

Allen & Overy pensions partner Dana Burstow advised the company on the restructuring.