Trust account monies do not reduce pension scheme claim

A claim in the administration in relation to a ‘section 75 debt’ calculated under the Pensions Act 1995 was not to be reduced by a subsequent payment of £2m to the scheme despite the calculation being made prior to that payment.

Kaupthing Singer & Friedlander Ltd (KSF) went into administration. BESTrustees plc were trustees of KSF’s pension scheme, which had a large deficit. The scheme actuary certified the deficit — a sum known as the section 75 debt — at £74.65m. Afterwards the scheme was paid a sum of £2m from a trust account set up by KSF shortly before the start of the administration proceedings. The administrators rejected the scheme’s proof of debt for £74.65m, arguing it should be reduced to take into account the £2m receipt.

The court found that as at the date of KSF’s administration, the actuary had attributed a nil value to the claim in relation to the trust account because of litigation risks. That valuation had not been the subject of any challenge. The court further held the scheme would not be unjustly enriched. The administrator’s rejection of the scheme’s proof of debt was unjustified…

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