OVERVIEW
This article was first published in International Corporate Rescue by Chase Cambria
The regulatory amendments drawn up by the Secretary of State for Work and Pensions following the outcome in Trustees of Olympic Airlines SA Pension &Life Assurance Scheme v Olympic Airlines SA have been drafted narrowly and may end up protecting no one other than the beneficiaries of the Olympic Airlines pension scheme.
The issue
Summary
The Court of Appeal’s judgment in The Trustees of the Olympic Airlines SA Pension & Life Insurance Scheme v Olympic Airlines SA [2013] EWCA Civ 643 has clarified what is required to fall within the definition of an ‘establishment’ for the purposes of the EC Insolvency Regulation (the Insolvency Regulation).
The Pension Schemes Bill [HL] 2019-20 (Bill) was re-introduced before Parliament on 7 January 2020. Among its proposed amendments to the Pensions Act 2004 (Act) are new criminal offences for failing to comply with a contribution notice, avoiding employer debt, conduct risking accrued scheme benefits, an expansion of the moral hazard powers and an extension of the ‘notifiable events’ framework. The Government’s stated intention is to “ensure that those who put pension schemes in jeopardy feel the full force of the law“.
There have been rumours in the pensions industry for a while that the Bonas case was not in fact the first contribution notice (CN) case to be decided by the Regulator's Determination Panel (Panel). In March 2012 these rumours proved to be true when the embargo in the case of the Desmond Pension Scheme was lifted and details were published for the first time. This speedbrief considers the Panel's determination to impose contribution notices on two individuals (Mr Desmond and Mr Gordon) and the Upper Tribunal's decision on various preliminary iss
The Court of Appeal has confirmed that where the Pensions Regulator (Regulator) exercises its anti-avoidance powers against a company during insolvency, the liability ranks as an expense in the insolvency process. The 14 October 2011 judgment, in a case involving the Nortel and Lehman Brothers groups, upheld the High Court's landmark decision of last year.
As you may recall, the High Court ruled in December 2010, in a case brought by the administrators of 20 insolvent companies in the Lehman and Nortel groups, that the cost of complying with a financial support direction ("FSD"), issued by the Pensions Regulator after the date of the commencement of a company's administration or liquidation, would rank as an expense of the administration or liquidation.
The story of the restructuring of carpet-maker, Brintons has featured in the press recently, with emphasis on the role of Carlyle, one of the world's biggest private equity firms. The facts are similar to the Silentnight pre-pack which we featured in a previous bulletin. In each case, the Pensions Regulator is said to be considering using its anti-avoidance powers under the Pensions Act 2004 to compel senior debt holders to pay towards the deficit of the defined benefit pension scheme operated by the company.
In relation to the Great Lakes UK Limited Pension Plan a settlement was again reached before a full hearing with the Determination Panel could take place as reported by tPR on 13 July 2011.
The Pensions Regulator (TPR) has announced that it has withdrawn moral hazard proceedings against Chemtura Manufacturing UK Limited and its US parent, Chemtura Corporation. This follows an agreement being reached by Chemtura with the trustees of the Great Lakes UK Limited Pension Plan (the Plan) over its funding package.