IRELAND - Complaints from members of the Parc Group pension fund that the company failed in its "moral obligation" to make up a shortfall in the scheme have been rejected by the Pension Ombudsman.
The Ombudsman received 32 separate complaints from members of the pension and life assurance scheme of the aviation firm Parc Group (now Novoparc and no longer trading) all centred around the sponsor's failure to repair its deficit. They claim the firm was financially capable and previously had stated its intention to do so.
Other complaints from members included a lack of disclosure to the trustees by Novoparc on its intention to sell the business. Concerns were also raised by members about alleged conflicts of interest relating to a trustee and trustee decisions regarding scheme investment.
Paul Kenny, the Pensions Ombudsman, said: "This case is very complex and convoluted. What looks like a black and white complaint at the start soon gets very grey when you get into the details."
In response to the main issue of failing to settle the deficit, the Ombudsman noted that the company had no legal requirement to make further contributions, except for wind-up costs, once the scheme had commenced winding-up in July 2008. Negotiations between the company and the trustees had resulted in an additional €1m contribution to the scheme.
Kenny stated in the decision: "I do not believe that the company failed in its moral duty in this instance. Could it have done more? Yes, however I don't believe that it was required to do so legally or morally."
In response to the allegations of trustee conflicts of interest, the Ombudsman conluded that because the trustee in question had sought and followed legal advice the individual did not act unreasonably.
The trustees' investment decisions were also cleared of fault. Kenny admitted that, in hindsight, the trustees should have shifted the scheme's investment strategy to reflect the changing circumstances. But, he said, "one cannot argue that the former trustees did not take due care in considering the best interests of the members in relation to the investment of the scheme assets".
Kenny concluded: "In all aspects of this case I believe the former trustees and IFG Financial services [the adviser] acted reasonably. Could things have been done differently, in different circumstances? In hindsight possibly. However, I must deal in facts when making a determination."
He admitted the company could have acted more favourably by paying the scheme deficit and noted that "under UK legislation, the company would have been required to make good the deficit on wind-up. However, UK legislation is not relevant in this case and Irish legislation has no such provision".
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