The Court of Appeal’s decision in the case of Heis v MF Global highlights the importance of documenting just who has responsibility for contributing to a defined benefit pension scheme.

EIS AND OTHERS V MF GLOBAL UK SERVICES LTD (IN ADMINISTRATION) [2016] EWCA CIV 569, [2016] ALL ER (D) 125 (JUN)

The Pension Protection Fund (PPF) levy Determination for 2016/17 was published on 17 December 2015. It follows a consultation with PPF stakeholders which was launched in September this year. The levy Determination sets out the rules for calculating a scheme’s annual PPF levy. In our September Update we reported on the key changes which were being proposed as part of the 2016/17 consultation process.    

Will you be ready for the March 2016 contingent asset submission deadline? Following the publication of the PPF’s draft levy determination for the 2016/17 levy year, we look at what questions you should be asking now to ensure you are prepared for the deadline.

Introduction:

The Government has launched a new consultation on a number of technical and regulatory changes affecting pensions legislation. One of the proposed changes is to amend the entry rules in relation to the Pension Protection Fund (PPF). The consultation follows on from the recent Supreme Court decision in Olympic Airlines and the introduction of specific legislation to ensure the beneficiaries of that particular scheme received protection in circumstances where the entry rules otherwise excluded them.

In April 2015, the Supreme Court dismissed an appeal bought by The Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme ("the Scheme") and held that Olympic Airlines SA ("Olympic Airlines") did not have an "establishment" in the UK when the Trustees presented a winding up petition in England on 20 July 2010.

The significance of the decision is that without a "qualifying insolvency event", the Scheme would not enter the Pension Protection Fund ("PPF") and is of significance for any defined benefit pension scheme of a UK branch office of an overseas company.

New guidance from the Pension Protection Fund (PPF) regarding pre-packaged administrations (pre-packs) outlines their approach to pre-packs when the same insolvency practitioner (IP) proposes to continue as office holder in any subsequent liquidation or company voluntary arrangement (CVA).

In the United Kingdom, the Pension Protection Fund (“PPF”) is the safety net for the employee members of a defined benefit pension plan or scheme.  The PPF compensates members when an employer has not and cannot put sufficient assets in the pension scheme to meet its obligations to member employees and the employer has suffered a “qualifying insolvency event”.

The Pension Protection Fund (PPF) has issued a guidance note on Insolvency Practitioner remuneration which will apply where the insolvent company has a Defined Benefit Pension Scheme. The guidance note applies to pre and post appointment work.

The Guidance Note can be found here.

The UK’s Pension Protection Fund (PPF) is about to publish new guidelines to reflect their increased focus on the approval of Insolvency Practitioner’s (IPs) fees. The guidelines require IPs to provide more regular detail of accruing and anticipated costs to the PPF when they are appointed over employers where Defined Benefit (Final Salary) pension schemes are significant creditors. More specifically IPs will now be required to provide a more detailed explanation of how their proposed remuneration reflects the value provided to creditors.

The trustees of the Olympic Airlines SA Pension and Life Assurance Scheme -v- Olympic Airlines SA

On 29 April 2015, the Supreme Court handed down its judgment in relation to the trustees’ appeal. The unanimous decision was in favour of Olympic Airlines SA (the respondent). The Supreme Court agreed with the Court of Appeal that the High Court was wrong and confirmed that in order for there to be an ‘establishment’ there must be some business dealings with third parties. The trustees’ appeal was therefore dismissed.