Pensions Pieces: how fixed are moral hazard time limits? Look-back in the Desmond matter

The provision of the so-called ‘moral hazard’ powers to the Pension Regulator under the Pensions Act 2004 has caused significant concerns, given the potential to pierce the corporate veil and make group companies and directors liable for an employer’s pension costs. One of the features that gave comfort to those worried was the strict time limits that apply to the issuance of contribution notices (six years since the event, and no earlier than 27 April 2004, when the substantive Pensions Bill was published) and financial support directions (originally one year and then changed to two years since the relevant circumstances existed).

However, over time this certainty has been reduced. First, to deal with procedural practicalities of issuance, the legislation has been amended so that the time runs to the issue of a warning notice, rather than the determination notice, to issue a contribution notice or financial support direction. More recently, cases seem to suggest a further look-back. The Box Clever decision, which is awaiting a reference hearing in the Upper Tribunal, aims to use a factual matrix going back many years in considering the reasonableness of a financial support direction. Also, the issue of time limits for a contribution notice has been considered in relation to the Desmond matter.

The Desmond matter relates to a Northern Ireland company and to a series of events in April to 3 June 2004. The Pensions Regulator issued a warning notice against Mr and Mrs Desmond and Mr Gordon in February 2010 in relation to contribution notices against them, and in May 2010 determination notices were issued against only Mr Desmond and Mr Gordon. The matter was referred to the UT both by Mr Desmond and Mr Gordon, and by the trustees by a reference dated 15 June 2010…

Click on the link below to read the rest of the Taylor Wessing briefing.

Briefings from Taylor Wessing

View more briefings from Taylor Wessing

Analysis from The Lawyer

  • merger deal

    Corporate crunch time: who will triumph at The Lawyer Awards 2014?

    As the equity capital markets rocketed back into favour and global M&A saw at least a partial return to form, there have been some rich pickings for The Lawyer’s Corporate Team of the Year award shortlisted firms in 2014. 

  • singapore orchid

    Singapore: Cash course

    The city-state is working hard to become a global wealth management hub, and law firms are gearing up for a prosperous new world

View more analysis from The Lawyer

Overview

5 New Street Square
London
EC4A 3TW
UK
http://www.taylorwessing.com

Turnover (£m): 228.00
No. of lawyers: 860
Jurisdiction: UK
No. of offices: 4
No. of qualified lawyers: 67 (International 50)

Jobs