TTG Pension Trustees Ltd v The Board Of The Pension Protection Fund

For a pension protection levy, the relevant Measurement Time may differ according to the purpose for which information is assessed. Under the 2011/2012 Levy Rules, a Contingent Asset had to be evaluated by reference to the Measurement Time applicable to Contingent Assets, namely 31 March 2011. The identity of the scheme Employer was therefore determined at that date for those purposes. A guarantee by the sole remaining employer of companies which had ceased to be scheme employers did not satisfy the Employer’s Associate condition and did not qualify as a recognised Contingent Asset. The appeal court may dismiss an appeal where the decision under challenge is legally correct, despite inadequacy or error in the reasons given for it.

The trustees of a pension scheme appealed under Pensions Act 2004, section 217, against a determination of the Pension Protection Fund Ombudsman. The Ombudsman had upheld the Board’s refusal to recognise a guarantee from the scheme’s principal employer as a Type A Contingent Asset for the 2011/2012 risk-based levy.

The guarantee was given after a scheme apportionment arrangement had caused the other participating employers to cease to participate in the scheme. The central issues were whether the scheme Employer had to be identified by reference to 31 March 2010 for all purposes, whether the guarantee reduced the relevant risk, and whether it satisfied the Contingent Asset Appendix.

1. Appeal dismissed. The Ombudsman’s determination was inadequately and in some respects incorrectly reasoned, but the determination itself was correct.
2. The Levy Rules deliberately distinguished the date for assessing risk from the date for assessing risk-reduction measures. Under rule A2.3(1), the Measurement Time for information relating to Contingent Assets was 31 March 2011. That was also the relevant time under rule A2.2(1) for identifying the scheme Employer when evaluating a Contingent Asset.
3. The court rejected the trustees’ submission that the identity of the scheme Employer was fixed at 31 March 2010 for all purposes of levy assessment. The 12 associated companies listed as primary obligors had ceased to be scheme employers in October 2010. At 31 March 2011 the guarantor was the only scheme employer.
4. Because the guarantor was not an associate of a scheme employer at the relevant time, the guarantee did not satisfy paragraph 6(a) of the Contingent Asset Appendix. It was therefore unnecessary to decide the additional requirement in paragraph 31(b).
5. Once the relevant Measurement Time was held to be 31 March 2011, the Board was also entitled to conclude that rule D2.3(2) was not satisfied. The guarantee did not reduce the risk of compensation being payable in respect of an Employer in relation to the scheme.
6. The court was concerned with the correctness of the determination, not the fairness of the resulting levy. The Ombudsman’s reasoning did not make the legally correct conclusion unlawful.

1. Pension Protection Fund Ombudsman: The Ombudsman’s determination dated 5 June 2013 upheld the Reconsideration Committee’s decision that the guarantee should not be recognised.
2. High Court (Chancery Division): The appeal under section 217 of the Pensions Act 2004 was dismissed. The determination was inadequately reasoned, but legally correct.