A Balancing Act: Trustees' Duties And Employers' Interests

The recent UK High Court decision in the case of Merchant Navy Ratings Pension Fund Trustees Limited and P&O Ferries Limited v Stena Line Limited and Ors1 will be of interest to both pension scheme trustees and sponsoring employers. The decision considers complex issues including the duties of pension scheme trustees when making decisions and the role of employers' interests in trustee decision making.

The Merchant Navy Ratings Pension Fund ("MNRPF") is an industry-wide defined benefit pension scheme. It has a large number of participating employers (both current and historic), many of which are competitors within the industry. The MNRPF had been in significant deficit since the late 1990s and its preliminary 2014 valuation showed a deficit, on an ongoing basis, of circa Stg£325 million. Under its rules, only current employers were liable to repair the deficit.

The case involved an application to the High Court by a trustee of the MNRPF to approve a proposed rule amendment under which former participating employers...