Alexander Forbes Trustees Services Ltd v Doe & Anor [2011] EWHC 3930 (Ch) (16 December 2011)

Alexander Forbes Trustees Services Ltd v Doe & Anor [2011] EWHC 3930 (Ch) (16 December 2011)

On the winding-up of a hybrid occupational pension scheme, assets allocated for relevant money purchase benefits under regulation 13 must be applied exclusively to satisfy those benefits and cannot be diverted to support defined benefit liabilities. Section 73 and regulation 13 together override any contrary scheme rules, except as expressly provided in section 73(4).

Citation
[2011] EWHC 3930 (Ch)
Parties
Claimant: Alexander Forbes Trustees Services Limited; Defendant (representing Defined Benefit Members): John Doe; Defendant (representing Money Purchase Members): Richard Roe
Jurisdiction
England and Wales
Judgment Date
16 December 2011
Procedural Posture
Trustee Application for Directions (chancery, Pensions) / First Instance Judgment
Outcome
Declaration granted in favour of money purchase members; assets allocated for money purchase benefits must be applied exclusively to those benefits.
Legal Topics
Winding Up of Occupational Pension Schemes, Priority of Pension Scheme Assets, Hybrid Pension Schemes, Interpretation of Pensions Act 1995 Section 73, Application of Occupational Pensions Scheme (winding Up) Regulations 1996 Regulation 13
Pensions Law Trusts Law Winding Up of Occupational Pension Schemes Priority of Pension Scheme Assets Hybrid Pension Schemes Interpretation of Pensions Act 1995 Section 73 Application of Occupational Pensions Scheme (winding Up) Regulations 1996 Regulation 13

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Parties

Alexander Forbes Trustees Services Limited

Claimant

John Doe

Defendant (representing Defined Benefit Members)

Richard Roe

Defendant (representing Money Purchase Members)

Procedural Posture

Trustee Application for Directions (chancery, Pensions) / First Instance Judgment

Legal Issues

  1. 1 Whether, on the winding-up of a hybrid occupational pension scheme, assets allocated for money purchase benefits can be used to satisfy defined benefit liabilities under section 73 of the Pensions Act 1995 as modified by regulation 13 of the Occupational Pensions Scheme (Winding-up) Regulations 1996.

Ratio Decidendi

On the winding-up of a hybrid occupational pension scheme, assets allocated for relevant money purchase benefits under regulation 13 must be applied exclusively to satisfy those benefits and cannot be diverted to support defined benefit liabilities. Section 73 and regulation 13 together override any contrary scheme rules, except as expressly provided in section 73(4).

Court Disposition

Declaration granted in favour of money purchase members; assets allocated for money purchase benefits must be applied exclusively to those benefits.

Orders

  • Trustees must apply the extracted fund for relevant money purchase benefits solely to satisfy those benefits, not to support defined benefit liabilities.
  • Scheme rules are overridden to the extent inconsistent with this construction.