Irish Pensions Magazine Spring 2015
22
Expert Opinion
members may be represented in court. The High
Court may make an order confirming, annulling or
varying the decision of the Pensions Authority to
appoint the new trustee. Any annulment or variation
in the appointment is without prejudice to anything
previously done by the trustee appointed by the
Pensions Authority.
The following points are also noteworthy:
(a)
The order may make provision for such ancillary
matters as the Pensions Authority consider necessary,
such as the making of payments from the scheme
or the employer to the trustees in respect of fees,
expenses or other matters relating to the duties of
the trustees.
(b)
The order will not act as a discharge of any
potential liabilities of a former trustee of the scheme.
(c)
A body corporate may be appointed as a sole
trustee notwithstanding that the rules of the scheme
provide for or require the appointment of more than
one trustee.
Appointment and Removal of Trustees by
the High Court
Section 64 of the Act deals with situations where no
trustee has been appointed or where the existing
trustee is untraceable.
However, the Pensions Authority also has power
under section 63 of the Act to petition the High
Court to remove and replace existing trustees on the
occurrence of one of two serious events.
In particular, section 63(1) of Act empowers the
Pensions Authority to petition the High Court to
make an order:
(a)
for the removal of an existing trustee from a
pension scheme and the appointment of a new
trustee in his or her place; and
(b)
the prohibition of the trustee that has been
removed from his or her position from acting as a
trustee of any pension scheme for such a period as
the High Court may decide.
The High Court may make an order under section 63
of the Act if the court considers:
(a)
that the trustees have failed to carry out any of
their legal duties; or
(b)
that the pension scheme involved is being
administered in such a way as to jeopardise the rights
and interests of the members of the scheme.
Section 63(3) of the Act provides that the petition
need only be served on the existing trustees of the
scheme concerned. The Pensions Authority, the
existing trustees, the sponsoring employer and the
members of the scheme are entitled to be heard as
part of the process of petitioning for a section 63
order.
Some important points of note in relation to an order
made by the High Court under section 63 of the Act
are:
(a)
any trustee appointed to a scheme under section
63 will have the same powers, authorities and
discretions as if that trustee had been appointed
under the rules of the scheme.
(b)
the order may make provision for ancillary
matters, such as the payment of the trustees from
the resources of the scheme or by the employers,
notwithstanding any contrary provision contained in
the rules of the scheme.
(c)
the order will not act as a discharge to any former
trustee of the scheme concerned.
(d)
the assets of the scheme that are registered in
the names of the removed trustees will automatically
transfer into the names of the new trustees.
Conclusion
The ability of the Pensions Authority to petition the
High Court to remove and replace a scheme trustee
under section 63 of the Act and the powers of the
Pensions Authority to remove and appoint trustees
under section 64 of the Act are weapons of last resort
in the armoury of the Pensions Authority. None the
less, in its Annual Report for 2013 Brendan Kennedy
the Chief Executive of the Pensions Authority stated:
“…the Authority continues to have concerns about
how well some trustees understand their role and
responsibilities. Where a trustee for whatever reason
cannot fulfil their obligations as a trustee they should
step aside and let somebody else take over this
responsibility.”
With this statement in mind it will be interesting to
see if the years ahead will see an appetite on the part
of the Pensions Authority to use its powers under
section 63 and 64 of the Act in situations where
trustees who are unable or unwilling to fulfil their
obligations refuse to “step aside” from their position
voluntarily.
Article Author
Stephen Gillick
Pensions and Employee Incentives
Group
McCann FitzGerald
