L & Ors v M Ltd [2006] EWHC 3395 (Ch) (27 October 2006)

L & Ors v M Ltd [2006] EWHC 3395 (Ch) (27 October 2006)

Regulation 2(2) of the Entry Rules is triggered only where a legally enforceable agreement is entered into by trustees or managers of a scheme at a time when a section 75 debt has actually arisen or a triggering event has occurred. Agreements made before such a debt arises or before a triggering event do not render the scheme ineligible for entry into the Pension Protection Fund.

Citation
[2006] EWHC 3395 (Ch)
Parties
Claimant/respondent: L & ORS (Trustees of the M Ltd Pension Scheme); Defendant/appellant: M Limited
Jurisdiction
England and Wales
Judgment Date
27 October 2006
Procedural Posture
Chancery Division Pension Law / Judgment on Interpretation of Regulation 2(2) of the Pension Protection Fund (entry Rules) Regulation 2005
Outcome
Application granted; declaration as to eligibility under Regulation 2(2) made in favour of the Company.
Legal Topics
Pension Protection Fund Eligibility, Section 75 Pensions Act 1995 Debt, Multi Employer Pension Schemes, Compromise of Pension Debts, Interpretation of Statutory Regulations
Pensions Insolvency Trusts Pension Protection Fund Eligibility Section 75 Pensions Act 1995 Debt Multi Employer Pension Schemes Compromise of Pension Debts Interpretation of Statutory Regulations

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Parties

L & ORS (Trustees of the M Ltd Pension Scheme)

Claimant/respondent

M Limited

Defendant/appellant

Procedural Posture

Chancery Division Pension Law / Judgment on Interpretation of Regulation 2(2) of the Pension Protection Fund (entry Rules) Regulation 2005

Legal Issues

  1. 1 Whether the Pension Proposal renders the Scheme ineligible for entry into the Pension Protection Fund under Regulation 2(2) of the Entry Rules
  2. 2 Proper construction of Regulation 2(2) regarding legally enforceable agreements reducing section 75 debts

Ratio Decidendi

Regulation 2(2) of the Entry Rules is triggered only where a legally enforceable agreement is entered into by trustees or managers of a scheme at a time when a section 75 debt has actually arisen or a triggering event has occurred. Agreements made before such a debt arises or before a triggering event do not render the scheme ineligible for entry into the Pension Protection Fund.

Court Disposition

Application granted; declaration as to eligibility under Regulation 2(2) made in favour of the Company.

Orders

  • The Pension Proposal does not render the Scheme ineligible for entry into the Pension Protection Fund under Regulation 2(2).
  • Further applications regarding confidentiality and access to the court file to be dealt with separately.