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Merrett Holdings v The Pensions Ombudsman 2

United Kingdom
09/06/1998
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Reference: (1999) 04 PBLR (18)

Over seven months the employer paid employer contributions into the scheme. After an interim actuarial report it was discovered that no contributions needed to have been made, and the contributions were returned to the employer. A pensioner, complained that this amounted to a return of surplus, which was prohibited by the rules of the scheme.

The Ombudsman upheld the complaint and the employer appealed.

The High Court held that where it was clear from the circumstances that the employer's contributions had been paid on account, a payment to the employer out of a pension scheme which represented recent employer contributions was not a breach of trust, even though the scheme rules did not permit payments to the employer. The scheme had annual actuarial valuations and the employer paid contributions at the previous year's rate until the valuation results for the current year were known.

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