Carey case appeal on the cards?
We reported on the most recent instalment in the Carey UK Pensions LLP (now known as Options UK Personal Pensions LLP) case law in last month's Pensions Insights. Carey/Options have applied for permission to appeal the latest outcome.
A clear case for rectification - Iggesund Paperboard (Workington) Ltd, Iggesund (UK) Pensions Limited v Messenger  EWHC 627 (Ch).
The High Court has granted rectification of documentation governing a pension scheme in what it referred to as "the clearest possible case for rectification of a pension deed based on an omission that was not noted by any of the persons involved".
The court also commented that the law on rectification can be taken as being settled and for the principles that apply it is unnecessary to look further than the recent judgment of Trower J in Univar UK Ltd v Smith.
In the case the claimants, both the principal employer and the trustee of the scheme, sought rectification on the basis that the Trust Deed and Rules governing the Scheme omitted wording which had been included in the previous Trust Deed and Rules. By simply referring to RPI and unintentionally omitting the phrase "or such other index as the actuary advises to be appropriate", RPI was hardcoded into certain provision in the later Rules.
The court did stress that it was not being asked to order that an index other than RPI applies, but merely to rectify the words used to what it was said they should have been but for an unintended error.
The defendants chose not to defend the claim and submitted their reasons in a confidential opinion to the court.
Public Service Pensions and Judicial Offices Bill
Introduced in the Queen's speech the Public Service Pensions and Judicial Offices Bill intends to make changes to the main public service pension schemes including to ensure equal treatment for members.
This follows successful challenges of amendments to public sector schemes which were found to amount to unlawful discrimination and the outcome of a subsequent consultation which confirmed the approach to be taken to address the issues was by means of a 'deferred choice underpin'. The underpin will allow eligible members a choice, at the point their benefits are paid, of which pension scheme benefits they would prefer to take in respect of the affected period.
TPR Corporate Plan confirms priorities
A new three year Corporate Plan published by TPR sets out its priorities which include implementing the Pension Schemes Act, combatting scams and developing a framework for measuring value for money. TPR notes that the plan reflects the commitments made in its long-term strategy and builds on the work done in recent years to be a clear, quick and tough regulator.
TPR's Annual Funding Statement
This year's annual funding statement considers, amongst other things the impact of COVID-19 on schemes on aspects such as covenant and mortality projections.
In relation to mortality assumptions the various views on potential impacts are set out noting that there are divergent opinions on the impact. TPR confirms its own view that trustees should ensure their mortality assumptions are balanced, evidence-based and derived using a sound methodology.
On post-valuation experience the statement, whilst noting that trustees can take account of post valuation experience (including significant changes in market conditions and the employer's covenant since the effective date of the valuation) when preparing recovery plans, trustees and employers are reminded that this is not an opportunity to simply pick the most favourable date for agreeing the recovery plan.
It is noted that TPR would usually expect any changes arising from factoring in favourable post-valuation events to reduce the length of the recovery plan rather than the level of annual payments.
On covenant it is noted that trustees should consider obtaining independent specialist advice to support covenant assessment especially if:
- the covenant is complex
- the outlook for any COVID-19 related recovery is unclear
- Brexit implications appear significant
- the covenant is deteriorating
- the scheme has a high degree of reliance on the covenant, for example because it has a large deficit or a high level of investment risk
DWF appoints new pensions partner - Marcus Fink
Marcus joins DWF having spent the past few years as an independent legal consultant working on high profile pensions matters. Prior to that, he was a director at PwC’s pension legal team until March 2019. Before that, he was a Partner and head of the pensions practice at Ashurst LLP.
Marcus has over 20 years of experience in advising clients on a broad range on pension matters, including advising on the pensions aspects of mergers and acquisitions, restructurings (both solvent and insolvent), investment law, data protection and regulatory compliance.
At DWF, Marcus will lead the pension team in London and focus on advising organisations and pension trustees on all aspects of pensions law.
Joanne Frew, Deputy Global Head of Employment & Pensions, at DWF said, "I am delighted that Marcus is joining DWF to lead our pension team in London. His experience and reputation in the market aligns with our business' deep pedigree in supporting clients though a huge range of pension matters. I look forward to working closely with Marcus and establishing a successful team in London."
Marcus, said, "I am excited to join DWF and lead the pension team in London. DWF's strong national identity and a clear global presence is definitely a key attraction to joining the business. My experience and drive, together with DWF's reputation in the market, will allow me to create a thriving practice in London. I look forward to getting started and working with the team."