Pensions are fun
30 June 2010 | By Margaret Taylor
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19 February 2014
Pensions, it has to be said, could bore even the most committed of geeks.
Pensions legislation, on the other hand, can send the lawyers working in that space quite giddy with excitement, given that the law can be interpreted in so many different ways.
Thanks to Mr Justice Warren, who this week delivered a judgment that appears to make sense of one of the most convoluted areas of pensions law, those lawyers will be able to enjoy something of a chill-out.
The mammoth judgment in The PNPF Trust Company v Geoff Taylor & ors, otherwise known as the Pilots Pension Scheme Litigation, is significant for a number of reasons, not least the fact that the opposing sides were working together to find answers to some rather baffling scheme funding questions (13 January 2010).
The confusion arose after a raft of legislation designed to protect pension scheme members from raiders like Robert Maxwell was passed in the early 1990s. The rules meant that employers would be obliged to pay into any ongoing scheme they were involved with and would also have to pay an exit fee to help fund any deficit when they ceased to be involved with the scheme.
So far, so simple, but the problem was that most employers already had agreements with their pension scheme’s trustees regarding how much money they should pay into the fund on an ongoing basis and it was unclear whether the legislation would override this. Also, nobody was really sure how ’ceased to be involved’ should be interpreted, meaning trustees of pension schemes such as the Pilots National Pension Fund, which was funded by multiple employers, would have difficulty working out when they could expect their lump sum.
Things were more confusing because it was never really clear whether employers were always under one or other obligation or whether there was a gap between making ongoing contributions and paying an exit fee that meant they could get away without paying anything.
The good news is that Warren J has ruled without doubt that there is no gap and that if scheme rules allow for a greater level of funding than the legislation would then trustees have the right to demand that higher level.
The bad news is that many companies will have thought they had paid everything they owed to fund former employees’ pensions only to find they haven’t.
Warren J was asked by Hogan Lovells partner Angela Dimsdale Gill and Wilberforce Chambers’ Michael Tennet QC, who represened the scheme trustee, to clarify around 40 points relating to scheme funding. While he has given the most definitive interpretation of the legislation yet, Warren J has not been able to iron out any of the complexities of pensions law.
To achieve that, yet more legislation could be in order. It looks like pensions lawyers might not be chilling out for long.
For Trust Company: Hogan Lovells partner Angela Dimsdale Gill instructed Michael Tennet QC of Wilberforce Chambers.
For Geoff Taylor: Linklaters partner Mark Blyth instructed Christopher Nugee QC of Wilberforce Chambers.
For Terry Clark: CMS Cameron McKenna partner Mark Grant instructed Andrew Spink QC of Outer Temple Chambers.
For Milford Haven Port Authority: Morgan Cole partner Michael Prior instructed Paul Newman QC of Wilberforce Chambers.
For Port of London Authority: Sacker & Partners partner Peter Murphy instructed Brian Green QC of Wilberforce Chambers.
For Shoreham Port Authority: Nabarro partner Jonathan Warne instructed Robert Ham QC of Wilberforce Chambers.
For Port of Tyne Authority: Eversheds partner Giles Orton instructed Sarah Asplin QC of 3 Stone Buildings.
For First Corporate Shipping (trading as Bristol Port Company): LG partner Thomas Ross instructed Michael Furness QC of Wilberforce Chambers.
For PD Teesport: Dickinson Dees partner Craig Monty instructed John Martin QC of Wilberforce Chambers.