We had internal training this week on the latest bit of legal loophole nonsense threatening to cost pension schemes a lot of money in legal costs. The issue is that of the Statutory Employer and has come about following the Pilots case (and others).
Essentially it seems that depending on where you look in pensions legislation there is a different definition of “employer”. The differences are subtle but enough to keep lawyers entertained for a while. The result of this is the bizarre situation that a company could believe it is responsible for the scheme, pay deficit contributions and levies but actually not be liable for any section 75 debt. Worse still the members of such a scheme could end up not being entitled to compensation under either the PPF or FAS!
So obviously rather than quickly tidy up the legislation it appears instead that all pension schemes will need to go through the process of identifying their Statutory Employer – often at significant legal cost. Then when all that money has been spent consideration will be given to extending FAS to catch those falling down the cracks.
Luckily I’ve saved everyone this trouble and drafted some new legislation. I call it the MJR Pensions Act 2011:
“For the purposes of xxx (list relevant acts/regs) in place prior to the effective date of this Act (the “Acts and Regulations”) the definition of employer is extended to include the other definitions included in the Acts and Regulations.”
Why can’t it be this simple for a change?