FSS Pension Trustees Ltd v The Board of the Pension Protection Fund
2014
CHANCERY DIVISION
United Kingdom
CORAM
- MR JUSTICE NEWEY
Areas of Law
- Constitutional Law
- Public International Law
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
The case addressed whether the FSS Pension Scheme qualifies as an 'eligible scheme' under section 126 of the Pensions Act 2004 and is liable for PPF levies. It was determined that the Government Guarantee did not meet the criteria under regulation 2(1)(d) of the Pension Protection Fund (Entry Rules) Regulations 2005, meaning the Scheme remains an 'eligible scheme' subject to levies.
Judgment
Mr Justice Newey:
This case is concerned with whether the FSS Pension Scheme (“the Scheme”) is an “eligible scheme” within the meaning of section 126 of the Pensions Act 2004 (“ the 2004 Act ”). The claimant, which is its trustee, argues that the Scheme is not an “eligible scheme” and, hence, that it neither qualifies for protection from the Pension Protection Fund (“the PPF”) nor is liable for the pension protection levies for which the 2004 Act provides. In contrast, the defendant, the Board of the PPF, submits that the Scheme is an “eligible scheme” and must pay the levies.
Basic facts
In December 2005, much of the business of the Forensic Science Service, which was an executive agency of the Home Office, was transferred to Forensic Science Service Limited (“FSSL”), a Government-owned company that had been incorporated a few months earlier. The Scheme was set up for employees of FSSL.
However, FSSL ran into financial difficulties, and in December 2010 the Government announced that the company would cease operations by March 2012. FSSL (which has been renamed Forensic Archive Limited) continues to act as custodian for certain items, but its work has otherwise been transferred elsewhere.
A question and answer document posted on FSSL’s intranet in December 2010 explained that the Home Office had “given assurances that employees’ accrued pension rights will be protected through a Government Guarantee”. In July of the following year, the Home Office sent the claimant draft heads of terms for the proposed guarantee, and a guarantee was in due course provided by a deed dated 31 January 2012. By this document (“the Guarantee”), the Home Secretary undertook to the claimant that, if FSSL did not meet any “Guaranteed Obligation”, she would do so. “Guaranteed Obligations” were defined to mean:
“subject to Clauses 4 and 11, all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally and in any capacity whatsoever) of the Company [i.e. FSSL as principal employer under the Scheme], arising on or after the Effective Date [i.e. 30 November 2011], to make payments to the Scheme up to a maximum amount equal to aggregate of:
(a) the shortfall between the value of the assets of the Scheme, and the amount of the liabilities of the Scheme in respect of pension and other benefits to be calculated and verified by the Scheme Actuary on the assumption that they will be discharged by the purchase of an