The Pensions Regulator has issued its report in respect of Bernard Matthews. Burges Salmon acted for the trustees in the matter and were appointed to assist the scheme at the point of investigation.
A key feature of this case as set out by the Pensions Regulator is that Rutland, owned the company for three years prior to exit and substantial corporate losses were suffered in each of those years.
The case must be considered on its own facts and there will be times when factors such as benefits paid to investors, obtaining security ahead of trustees and conduct of pre pack sales will constitute moral hazard.
Reflecting the nature of the statute, the question of reasonableness and detriment are ones that have to be considered in context. For example had a business been bought and then went into an insolvency shortly afterwards, this could potentially be a factor that would increase the prospect of there being material detriment regulatory action.
In these busy and important times for schemes and employers, it is vital to consider all the the elements of the Bernard Matthews case rather than necessarily consider it as a precedent for any point in isolation.
This need to consider the full position is a matter that the Burges Salmon team have seen as a clear theme on the range of leading regulatory cases we have acted on from Desmonds to Coats, Macdonalds, Great Lakes, N W Brown and others.
Timeline August 2013 – Rutland provides £25 million funding to BML 2013-15 – BML losses before tax reduce from £18 million to £3.7 million Late 2015 – poultry prices decline, BML extends banking facilities by £10 million Losses in the year to 30 June 2016 increase to £26 million 20 September 2016 – BML goes into administration and the business and assets are acquired by BPO