Scheme actuary valuations cannot be challenged

The High Court ruled employer debt calculations by the scheme actuary cannot be challenged by insolvency practitioners unless there is evidence of error or fraud.

Law firm Dundas & Wilson, which represented the PPF, said the judgment is very good news for the lifeboat fund as well as for pensioners of defined benefit schemes of insolvent employers.

Corporate recovery partner John Verrill said: "They can now take comfort from the fact insolvency practitioners are unable to set aside actuary’s certificates simply because of a belief that their analysis is more sophisticated."

Asbestos producer Turner & Newall collapsed in 2001 leaving its 30,000 pension scheme members with an uncertain future.

In order for the PPF to assume responsibility for the scheme, the wider T&N Group had to have company voluntary arrangements approved.

Supervisors representing 14 T&N subsidiaries argued the scheme actuary certificate, which said the debt was around £94m, was wrong because staff had been exposed to asbestos and so their life expectancy would be shorter.

They said T&N should pay £10m less but Mr Justice David Richards ruled the PPF could rely on the actuary’s calculations.

Verrill added: "This case closes out the final area of uncertainty. The PPF will get the certainty going forward that the employer debt in insolvency cases is based on the scheme actuary’s valuation and not a free for all."