This summer has seen several pension issues making the news. They show how essential it is for employers and trustees to keep abreast of how developments impact on their arrangements.
Jay Doraisamy looks at five areas which have made the headlines this summer:
The High Court has recently considered whether a bankrupt individual of pensionable age can be forced to draw his pension to pay his creditors.
Raithatha v. Williamson [2012] EWHC 909 (Ch)
Background
A bankruptcy order was made against Mr Raithatha on 9 November 2010. Mr Raithatha's trustee in bankruptcy applied for an income payments order (IPO) against Mr Raithatha's pension shortly before he was due to be discharged from bankruptcy. Mr Raithatha was then aged 59 and his pension scheme allowed him to draw a pension from age 55.
Pension scheme assets can rise and fall. So can liabilities. The timing of the section 75 debt calculation is, therefore, critically important to the ability of the scheme to meet its liabilities.
So when should trustees calculate their section 75 debt? Can they use one date to calculate scheme assets and choose a different date to calculate the cost of buying out the scheme’s liabilities?
The High Court has recently considered whether a bankrupt individual of pensionable age can be forced to draw his pension to pay his creditors.
Raithatha v. Williamson [2012] EWHC 909 (Ch)
Background
A bankruptcy order was made against Mr Raithatha on 9 November 2010. Mr Raithatha's trustee in bankruptcy applied for an income payments order (IPO) against Mr Raithatha's pension shortly before he was due to be discharged from bankruptcy. Mr Raithatha was then aged 59 and his pension scheme allowed him to draw a pension from age 55.
Pension scheme assets can rise and fall. So can liabilities. The timing of the section 75 debt calculation is, therefore, critically important to the ability of the scheme to meet its liabilities.
So when should trustees calculate their section 75 debt? Can they use one date to calculate scheme assets and choose a different date to calculate the cost of buying out the scheme’s liabilities?