Independent Trustee Services Ltd v Hope & Ors

Independent Trustee Services Ltd v Hope & Ors

The trustee may not lawfully implement the proposal to purchase buy-out policies using a disproportionately large share of scheme assets prior to entry into the Pension Protection Fund, as this would be an exercise for an improper purpose, contrary to the fundamental purpose of the scheme and public policy. The existence of the PPF is not a relevant consideration for the trustee in exercising its discretionary power. Community law does not override these conclusions.

Parties
Claimant: Independent Trustee Services Limited; First Defendant: Paul Hope; Second Defendant: The Board of the Pension Protection Fund; Third Defendant: The Pensions Regulator; Fourth Defendant: Alan Slater
Jurisdiction
England and Wales
Judgment Date
10 November 2009
Procedural Posture
Application for Directions / Judgment
Outcome
Application dismissed
Legal Topics
Exercise of Trustee Powers, Improper Purpose, Public Policy, Statutory Interpretation, European Community Law, Pension Protection Fund, Buy Out Policies
Trusts Pensions Public Policy Exercise of Trustee Powers Improper Purpose Statutory Interpretation European Community Law Pension Protection Fund +1 more

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Parties

Independent Trustee Services Limited

Claimant

Paul Hope

First Defendant

The Board of the Pension Protection Fund

Second Defendant

The Pensions Regulator

Third Defendant

Alan Slater

Fourth Defendant

Procedural Posture

Application for Directions / Judgment

Legal Issues

  1. 1 Whether the trustee may properly exercise its power to purchase buy-out policies for scheme members prior to entry into the Pension Protection Fund in circumstances where the scheme is underfunded and the employer is insolvent
  2. 2 Whether the existence of the Pension Protection Fund is a relevant consideration for the trustee in exercising its discretionary power
  3. 3 Whether the proposal constitutes an improper purpose or breach of public policy

Ratio Decidendi

The trustee may not lawfully implement the proposal to purchase buy-out policies using a disproportionately large share of scheme assets prior to entry into the Pension Protection Fund, as this would be an exercise for an improper purpose, contrary to the fundamental purpose of the scheme and public policy. The existence of the PPF is not a relevant consideration for the trustee in exercising its discretionary power. Community law does not override these conclusions.

Court Disposition

Application dismissed