Equity and succession

Pensions transfer to another scheme without members consent transferring and receiving scheme applying to employment with same employer irrelevant that transferring beneficiary no longer employed...Pensions transfer to another scheme without members consent transferring and receiving scheme applying to employment with same employer irrelevant that transferring beneficiary no longer employed by that employerMerchant Navy Ratings Pension Fund Trustees Ltd v Chambers and Another: ChD (Blackburne J): 7 February 2001The claimant (trustee of an occupational pension scheme for merchant seamen) sought the approval of the court for a proposal to secure the future of the scheme in circumstances in which it would otherwise have had to be wound up owing to a severe deficiency of funds relative to the schemes present and future liabilities.The second defendant, a pensioner member of the scheme, joined as a representative of all members opposed to the claimants proposal contended among other things that the trustee had no power to transfer members accrued benefits to another scheme without their consent, alternatively that the scheme actuary could not certify that the proposal was in the best interests of the members (as required by regulation 3 of the Occupational Pension Schemes (Modification of Schemes) Regulations 1996) because of the trustees new power under the proposal to replace a members entitlement/accrued rights under the scheme with an entitlement under another scheme.Nicholas Warren QC and Caroline Furze (instructed by Rowe & Maw) for the claimant.

Christopher Nugee QC (instructed by Hammond Suddards Edge) for the first defendant.

Nigel Inglis-Jones QC (instructed by Hill Dickinson, Liverpool) for the second defendant; Brian Green QC (instructed by Sacker & Partners) for the third defendant.Held, sanctioning the proposed scheme, that a member whose pensionable service terminated before normal pension age was entitled either to short service benefit, payable as from normal pension age (or the age of 60), or to transfer those accrued rights to another scheme; that such a transfer could only take place without the consent of the member concerned subject to the conditions imposed by paragraphs 1-3 of regulation 12 of the Occupational Pension Schemes (Preservation of Benefits) Regulations 1991 (SI No.

167 of 1991); that the condition imposed by paragraph 2(a) of regulation 12 was met provided both the transferring scheme and the receiving scheme applied to employment with the same (withdrawing) employer, whether or not the transferring beneficiary had ever been employed by that employer; that, on the issue of certification, the question the court had to ask itself was whether, in respect of the exercise of the power in a manner capable of affecting the members entitlement etcetera on a particular occasion, the certification requirements were met in respect of that member; that it was for the scheme actuary to certify whether the proposed alterations would adversely affect any members of the scheme; and that whether a members entitlement under the scheme could be replaced by an entitlement under another scheme did not, of itself, take the proposal outside the certification requirement.