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Chancery DivisionFriday 27 February 2015
Merchant Navy Ratings Pension Fund Trustees Limited v (1) Stena Line Limited (2) P&O Ferries Limited (3) Sealion Shipping Limited (4) International Marine Transportation Limited (5) Terence Brown
Merchant Navy Ratings Pension Fund Trustees Limited v (1) Stena Line Limited (2) P&O Ferries Limited (3) Sealion Shipping Limited (4) International Marine Transportation Limited (5) Terence Brown, [2015] EWHC 448 (Ch)
The mounting deficits in occupational pension schemes are important to members and employers, but in different ways. Companies will be concerned by the large pension deficits in their schemes, and want to have the flexibility to meet them over time in order to avoid putting an undue strain on their businesses. However, from the members’ perspective, they will want the deficit to be met as quickly as possible because if their employer goes under before the deficit is met, then they will not get their full pensions (in that situation, there is a statutory lifeboat fund called the Pension Protection Fund that will protect part of their pensions, but not all of their pension). Members are recognising this evermore, having thought for years that being promised a final salary pension meant that they would definitely get it in full.
The Merchant Navy Ratings Pension Fund case deals with how this balance should be struck between these potentially different interests. In particular, can trustees of occupational pension schemes take into account the interests of the companies funding the scheme when the trustees come to reach a decision on how such deficits should be met and over what period? While earlier cases have dealt with this issue in passing, this is the first case to face this issue head on. The specific case concerns the Merchant Navy Fund, which has a multi-£100m deficit.
The other issue that the case deals with is what happens when a scheme is closed to future accrual by an employer, which is increasingly happening in the marketplace as companies seek to limit their pension costs. How should the scheme be run after that point?”
Wilberforce Chambers are representing almost all of the parties involved: Michael Tennet QC, Edward Sawyer and James Walmsley (For the claimant Merchant Navy Ratings Pension Fund Trustee Ltd), Brian Green QC and Jonathan Hilliard (For the first defendant (1) Stena Line Ltd), Jonathan Evans QC (For the third defendant (3) Sealion Shipping Ltd) and Paul Newman QC and Emily Campbell, (For the fifth defendant Terence Brown)
Download the Judgment here (Crown Copyright)