The Court of Appeal has dismissed Aon's appeal in Aon Pension Trustees Ltd v MCP Pension Trustees Ltd.
The trustee's insurers argued that Aon, the scheme administrator, should reimburse the insurer for sums due to missing beneficiaries whose records had been lost and who had emerged after the winding-up of the scheme had been completed. On winding-up, the trustee had taken out missing beneficiaries insurance cover and issued advertisements under section 27 Trustee Act 1925. Because none of those beneficiaries had responded to the s27 notices, Aon argued that the trustees had no notice of their claims. If Aon's argument succeeded, there would be no liability towards those beneficiaries and no insurance claim which Aon could be required to reimburse. High Court judgment
The High Court had held that the trustee had notice of the claims of those members; it was irrelevant:
For details see Pensions Update, June 2009
a) that they had forgotten about them; and b) that those members had not responded to the trustee's section 27 notices.
The scheme administrator was therefore liable to the missing beneficiaries.
Aon appealed. The Court of Appeal upheld the High Court decision, stating: “It is quite impossible to say that notice lapses with memory… Section 27 does not have that effect. It would be astonishing if, as between the interests of the innocent beneficiaries and forgetful trustees, Parliament had intended to give precedence to the interests of the latter”.
This case is a useful reminder to trustees of the importance of ensuring membership records are up to date and of considering taking out insurance on winding up.