As more and more sponsors of defined benefit schemes are preparing to terminate contributions to their schemes or are going into receivership, examinership or liquidation, a question which keeps arising for trustees is whether or not they are under a duty to demand payment of the scheme’s deficit.

When trustees either know or have a justifiable belief that the sponsor of their defined benefit scheme is about to terminate its contribution liability or suffer an event of insolvency, our view is that the trustees need to take immediate action. The first thing they need to do is to look at the scheme’s employer contribution rule and the winding-up provisions and see what powers they have.  Only then can they decide what to do. 

Continue Reading Trustee contribution demands: is there a duty to make them?