Pensions update: Omega Pharma decision
On 25 July 2014, the Irish Commercial Court handed down judgment in the case of Holloway and Others v Damianus BV and Others — otherwise known as the Omega Pharma case. The court directed the employers of the Omega Pharma scheme to pay €2.23m (£1.77m) to the trustees as a result of the employers’ failure to meet a contribution demand made by the trustees upon the winding-up of the scheme.
Briefly, in October 2012, the principal employer gave three months’ notice of its intention to terminate contributions to the Omega Pharma pension scheme. During the notice period, the trustees sought to engage with the three scheme employers on the scheme’s deficit but no such engagement took place. The trustees therefore sought legal and actuarial advice and, notwithstanding the fact that there was no deficit on the funding standard basis (the MFS) prescribed under the Pensions Act 1990 (as amended), made a contribution demand in the sum of €3m. This sum was judged by the scheme actuary to be a fair assessment of the scheme’s deficit and was calculated using a mixture of annuity costs and transfer values, rather than a straightforward annuity buy-out basis, which would have resulted in a higher level of deficit (circa €5.8m)…
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