UK - A High Court ruling that a pension scheme can only calculate its shortfall once could penalise active members, consultants warn.
Actuaries believe the decision means trustees are now “unlikely” to secure the maximum employer debt to the scheme.
Mercer Human resource Consulting partner Matthew Demwell said: “There is much uncertainty about how you pick the right moment for certification and this leads to potential conflict of interest between the trustee and the employer.”
He said: “If an employer debt crystallises on one date, any actuary must go out of his way to maximise the debt to the employer.”
Demwell spoke out following the High Court court case between the Bradstock Group Pension Scheme and the Bradstock Group when the judge ruled that once an employer has been told of a shortfall in wind-up, the figure is not open to amendment.
Buck Consultants senior consulting actuary David Kershaw said that the ruling would make it extremely difficult to know when to lodge a certification of shortfall as a fund’s deficit could change “significantly” during wind-up.
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