The discovery of mistakes in pension scheme documents is as common as it is potentially serious for the administration of the scheme and for the sponsoring employer. The large sums invested in pension schemes mean that such mistakes are often very costly indeed.
This book provides a practical guide to the different methods available to correct commonly-occurring mistakes in the governing provisions of pension schemes. It combines a detailed review of the law with (where relevant) practical tips, including analysis of the appropriate practice and procedure involved in the key methods of correction.
With a significant body of case law enabling more authoritative answers to be given to the legal issues affecting the correction of pension scheme mistakes, and more and more mistakes being discovered because of the move to secure pension scheme liabilities with insurance companies, trustees and employers need swift and accurate legal advice on what they can do to correct such mistakes. This book provides them and their legal advisers with that advice ensuring they do not make the same costly mistakes that others have made.
This book will help the reader to:
· To select the most appropriate method of correcting the mistake
· Consider including provisions in the terms of the pension scheme which may make the correction of the mistake easier and cheaper
· Select the most tax-efficient way of correcting the mistake
· Understand the processes involved in correcting the mistake
· Better advise their clients as to how to deal with the mistake
Author(s): Paul Newman
Publisher: Bloomsbury Professional
Year: 2022
Language: English
Pages: 378
City: London
Foreword
Preface
Abbreviations
Table of Statutes
Table of Statutory Instruments
Table of European Legislation
Table of Cases
Table of Pensions Ombudsman Determinations
Chapter 1 – Types of mistake
A taxonomy of pensions mistakes
Document errors
Administration errors
Decision errors
Practice point 1: amendments to look out for when reviewing scheme documents
Practice point 2: building in protection to prevent a document error becoming operative
Chapter 2 – Proving compliance
When evidence of a formal record is necessary
Proof of the formal record
Can compliance with the formality be inferred or presumed?
Presumed exercise of a power
Practice point 1: establishing an inference or presumption that formalities have been satisfied
Practice point 2: drafting meeting minutes
Chapter 3 – Amendment
Restrictions in amendment powers
Statutory restrictions
Other amendment powers
Saving part of the amendment
Amending powers of amendment
Practice point: ascertaining the proper scope of the amendment power
Chapter 4 – Saving part of the amendment
The early cases
Bestrustees plc v Stuart
Subsequent cases
Wedgwood Pension Plan Trustee Ltd v Salt
The role of the Hastings-Bass requirement
New joiners
Section 67 of PA 1995
Practice point: partial invalidity clauses
Chapter 5 – Construction
Using general principles of construction to resolve ambiguities
Using corrective construction to deal with unambiguous mistakes
Practice point: including express provisions on construction in a deed of amendment
Chapter 6 – Rectification
Legal principles
Procedure
Practice point: can rectification be avoided?
Chapter 7 – Setting aside for mistake
The rule in Hastings-Bass
Equitable rescission
Mistake as to purpose
Practice point: can an express provision overcome Smithson v Hamilton?
Chapter 8 – Other equitable principles
‘Equity treats as done that which ought to be done’
Equitable relief against defective execution
Equitable non est factum
Chapter 9 – Contract and estoppel
Contract
Estoppel
Practice point: establishing a group estoppel
Chapter 10 – Mistaken overpayments
Must the trustees recover overpayments?
Methods of recovering overpayments
Defences to the recovery of overpayments
Tax consequences of overpayments
Procedure for recovering overpayments
Practice point: handling multiple overpayment cases
Chapter 11 – Mistaken underpayments
The trustees’ primary obligation
Interest on arrears
Limitation
Forfeiture of benefits
Tax consequences of underpayments
Practice point: the steps the trustees will be expected to take to make good underpayments
Chapter 12 – Mistakes in scheme transfers
Compensation for underpayments
Recovery of overpaid transfers
Delays in making transfer payments
Practice point: the steps the trustees will be expected to take compensate underpaid transfers
Chapter 13 – Decision errors
Correction by the trustees/employer
Correction following a challenge by the member
Practice points: avoiding decision mistakes
Chapter 14 – Procedure
The Pensions Ombudsman
Court proceedings
Practice point: how to control the cost of pensions litigation
Chapter 15 – Compromises
Preliminaries to a compromise
Procedure for court approval
The terms and effect of court approval
Practice point: the terms of the compromise
Chapter 16 – Negligence
Structure of the claim
Duty of care
Breach of duty
Causation
Quantum
Defences
Limitation
Practice point: key steps in negligence claims
Chapter 17 – Tax
Mistaken overpayments
Mistaken underpayments
Mistakes in transfer payments
Rectification and setting aside claims
Practice point: liaising with HMRC
Index
