High Court approves MNRPF ill-health benefit settlement

Settlement resolves complex issues arising from IHER benefits first introduced in 1985

Jonathan Stapleton
clock • 2 min read
Stena Line was chosen as a representative employer in the case

Stena Line was chosen as a representative employer in the case

The High Court yesterday (24 February) approved a settlement in relation to the ill-health early retirement (IHER) benefits paid by the Merchant Navy Ratings Pension Fund (MNRPF).

The case - which the trustee of the industry-wide scheme began in February 2019 - sought directions on various legal questions arising from the provision, revision, and removal of enhanced IHER benefits first introduced into the MNRPF in 1985.

As is usual with this type of case, the trustees took a neutral stance on the issues and the court appointed representative parties to act for the members and the participating employers, with independent lawyers paid for by the MNRPF.

In this respect, Stena Line broadly represents all the participating employers and two members broadly represent all affected members.

In August 2021, the parties entered into a settlement agreement under which the MNRPF would pay compensation to the members who were adversely affected by past decisions over the entitlement to IHER benefits.

This was due to be considered for approval by the High Court in October 2021, but the hearing was adjourned because new issues were identified over potential mis-alignments between the benefits paid in practice by the fund and the scheme's historic trust deed and rules which might affect the compensation under the settlement.

Following a period of negotiation, a revised settlement was agreed and approved by the High Court on the basis that it is for the benefit of both members and the employers.

The agreement reached will implement the payment of compensation under the original settlement, but allows for the trustees to adjust the position at later stages to take into account the new issues when they are resolved.

Implementing the settlement

The MNRPF trustees have been preparing to implement the settlement for some time with their administrators and advisers.

The scheme will be providing lump-sum arrears and increased pensions in relation to several thousand affected members.

The affected members are in three broad categories - those whose IHER benefits were scaled back when first put into payment; those whose IHER benefits were suspended or reduced following a review; and those with the necessary service and who became permanently unfit for sea service, but who were not provided with an IHER benefit because it had been incorrectly withdrawn when they left service.

The MNRPF said level of compensation under the settlement will vary for each affected member - noting there is also a claims process for those who were not provided with an IHER benefit.

MNRPF independent trustee chair John Oldland commented on the settlement. He said: "The trustee welcomes the certainty that this settlement brings for members and employers and that it avoids the need for further time and cost for the case to go to a full trial.

"The trustee has done all it can to facilitate the long settlement process to reach the point where the settlement can now be implemented. The trustee, in conjunction with its advisors, will now be working very hard to ensure payments under the settlement are paid to affected members in the shortest possible timeframe."

Linklaters acted for the trustee in the case.

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