THE TRUSTEE IS PETITIONING THE COURT FOR DIRECTIONS
On 10 March 2020 the Trustee of the Scheme presented a petition to the Court of Session in Edinburgh. In the petition, the Trustee is seeking directions from the Court about the circumstances in which it is entitled to an indemnity from the funds of the Scheme under the Scheme’s Rules.
On 18 March 2020 the Court made an order for the petition to be advertised on the Scheme’s website and to be published by way of advertisement in The Times newspaper. The order also set out a 21 day time-limit for lodging answers to the petition from the date of the advert. The advert in The Times was published on 23 March 2020. In light of the current difficulties being faced by everyone, the Trustee has applied to the Court to extend the period for lodging answers to 35 days ie to 27 April 2020. The Trustee has agreed a further 1 week extension and will consent to any party seeking to lodge answers at Court up to and including Monday 4 May 2020. The period for lodging answers ended on 4 May. Two sets of answers have been received. Further information can be found here.
The full text of the petition can be found here, the Court’s order can be found here and formal notice can be found here. The petition was sisted (put on hold) until 5 January 2021. There is a further period of adjustment until 10 March 2021. A procedural hearing will take place on 30 March 2021. As and when the Court fixes a substantive hearing of the Petition and Answers or makes any other orders which it requires to be published on the website we shall update this page.
The Scheme was established in 1975. Pensions legislation has changed substantially since the Scheme was established. In particular, since 2 September 2005, pensions legislation has required employers in multi-employer schemes (such as the Scheme) who leave to pay an amount known as a “section 75 debt” to the scheme.
Over 3,500 employers have left the Scheme since 1975, in most cases without having paid the amount of the section 75 debt required now by current legislation. The section 75 debts due by employers who have left the Scheme since 2 September 2005 are in many cases very substantial.
Until recently, the Trustee has not been able to calculate section 75 debts, however it is able to do so now and has recently been calculating and issuing section 75 debt notices to the relevant Scheme employers.
This has led to some employers raising complaints against the Trustee on a number of different grounds.
In order to carry forward the administration of the Scheme the Trustee needs clarity about whether it is able to use Scheme funds to cover expenses in relation to section 75 debt-related matters. When the Court makes its final order under the petition, the order is expected to give that clarity.