Trustees of the Merchant Navy Ratings Pension Fund, Surrey, England, won approval from the High Court of Justice on Wednesday to introduce a new deficit contribution plan that requires all employers to pay contributions to deal with a more than £300 million ($462.8 million) deficit.
About 250 employers have participated at one time or another in the MNRPF, which has about £780 million in assets and is a pension fund for multiple industry employers. However, since 2001, only about 40 employers have been required to pay contributions to reduce the deficit for reasons that could not be learned by press time.
“Members and sponsoring employers alike can take assurance from those decisions having been subject to scrutiny by the court, with the benefit of detailed submissions on behalf of both the members and sponsoring employers,” said Edmund Brookes, chairman of the trustee board, in a statement by the MNRPF. Mr. Brookes added that the trustee intends to formally introduce the new plan soon.
The trustee's decision to introduce the new arrangement, requiring all employers involved in MNRPF to make contributions to repair the deficit, was opposed by a number of the employers and members. MNRPF was established in 1978 and frozen for future benefit accruals in 2001.
“The judgment broadly reflects the guidance by the Pensions Regulator under its new funding code and allows trustees to take account of the interests of the sponsoring employer,” said Duncan Buchanan, partner at law firm Hogan Lovells, attorney for one of the defending parties in the case, in a separate statement. “However, there is no obligation on trustees to do so and the judge's statements about the need to focus on the primary purpose of securing benefits and the employer's covenant will mean uncertainty for some schemes.”