Trustee decisions and the Pension Protection Fund

Produced in partnership with Wyn Derbyshire of gunnercooke LLP

Practice notes

Trustee decisions and the Pension Protection Fund

Produced in partnership with Wyn Derbyshire of gunnercooke LLP

Practice notes

When making decisions, trustees are required, among other things, to:

•
act in the best interest of scheme beneficiaries
•
act for a proper purpose
•
have a level of knowledge and understanding of pensions law
•
take into account all relevant factors, while disregarding matters that are irrelevant. When trying to apply this principle in practice, trustees must consider:
1. ◦
  what constitutes a relevant factor, and
2. ◦
  the extent to which the trustees can (or should) take such a factor into account

For further information on trustee duties, see Practice Note: Duties of pension trustees.

These issues became the subject of the High Court case, Independent Trustee Services Ltd v Hope (the Ilford case), which concerned the relevance of the Pension Protection Fund (PPF) in the trustees’ decision-making process.

The Ilford case—the facts

Independent Trustee Services Ltd was the sole corporate trustee of the Ilford pension scheme, a defined benefit occupational scheme sponsored by Ilford Ltd (Ilford). Ilford entered into Administrative Receivership, an event which did not constitute a

Wyn Derbyshire

Partner, gunnercooke LLP

Wyn is a partner at gunnercooke LLP and specialises in pensions, trust and employment law in all industry sectors, dealing with the transactional, advisory and documentation aspects.

He also has wide experience of the pensions implications of heavyweight corporate transactions and flotations, the issues arising from the establishment and merger of pension schemes, and sex equalisation and other discrimination issues in respect of benefits provided by pension schemes. In addition, he provides advice to pension scheme trustees generally.

Recent transactions include advising Amcor on pension matters relating to the acquisition of Alcan business and the acquisition of Northern Foods PLC by Boparan Holdings.

He is a co-author (with Stephen Hardy and Stephen Maffey) of TUPE: Law and Practice, published by Spiramus Press (now in its 4th edition), and co-author (with Stephen Hardy and David Wicks) of Money & Work, published by Spiramus Press in August 2007. He has also written several other books and numerous articles on a variety of legal and non-legal topics.

Jurisdiction(s):

United Kingdom

Key definition:

Pension Protection Fund definition

What does Pension Protection Fund mean?

The Pension Protection Fund (ppf) is a discontinuance fund which takes assets from the underfunded schemes of insolvent employers and provides a reduced level of benefits.

Trustee decisions and the Pension Protection Fund

Produced in partnership with Wyn Derbyshire of gunnercooke LLP