This case centred on the impact of section 75 of the Pensions Act 1995, and regulations under that section – the Occupational Pension Schemes (Employer Debt) Regulations 2005 ("the Employer Debt Regulations") as amended from time to time, on the Albemarle Baptist Church ("the Church").

The Pensions Ombudsman held that the Baptist Union of Great Britain ("the Union") and Baptist Pension Trust Limited ("the Trustee") had no duty to warn the Church of its potential employer debt obligations resulting from enrolling a part time minister into the Baptist Ministers' Pension Fund ("the Fund") in 2007.


Reverend 'M' was appointed as a part-time minister of the Church in 2007 and became a member of the Fund, upon which the Church re-commenced its participation in the Fund.  The minister was the only person relating to the Church in active membership in the Fund at that time. The Fund rules provided that a minister could join the Fund by application to the Trustee (i.e. the Church strictly had no say in this) and if a minister did decide to join, the Church would become liable to pay contributions. Reverend M remained in the Fund for a period of just 11 months and her successor did not wish to join the Fund. 

There had been some uncertainty about if and how the Employer Debt Regulations applied to the Fund (it being an arrangement to provide pensions for ministers in 'qualifying office' with, until 2011, no explicit terms about the participation of specific churches). This was only confirmed following the decision in a case in 2010 and the Trustee taking legal advice in 2011 which confirmed their application in relation to the Fund. Following this, the Fund rules were also amended to ensure that 'participating employers' was defined clearly to reflect the position. What this meant was that if participation ceased, the Employer Debt Regulations applied, requiring the exiting employer to pay its share of any deficit in the Fund (plus valuation costs).  When the trustees became aware that the churches were to be regarded as employers it wrote to all churches notifying them of this (but of course after the Church's participation with respect to Reverend M had already ceased).

The Trustee recognised that due to the high turnover in church staff, there had technically been a significant number of termination events, affecting many churches and, because of the application of the Employer Debt Regulations, requiring them to pay lump sums into the Fund which they could ill afford. The Trustee, following discussions with the Pensions Regulator and the PPF decided that it would distinguish between 'genuine' and 'non genuine' termination events – the latter would include where a church might, in future, participate in respect of a future minister, and in such cases the trustees agreed they would not process any debt so long as they were satisfied about arrangements to pay shortfall contributions in the future.

Following Reverend M's departure from active membership, the Trustee wrote to the Church  saying that this had been a 'non genuine' cessation event and asked for contributions to the Fund from the Church.

The Church objected to this, saying that the Trustee should have highlighted the implications of the Employer Debt regulations before the Church re-joined the Fund in 2007. It said that it was not told that it was a participating employer and so would be responsible for the Fund deficit and that if it had been made aware of that it would not have allowed Reverend M to become a member and would have made other arrangements. The Church also contended that the contributions now being demanded by the Trustee were an unfair burden, it being a small fellowship of 15 people all of whom were over 60, and it also disputed the underlying calculation of those contributions (being based on a full time 'employee' even though the minister had only been employed part-time).


The PO agreed with the Trustee that the Employer Debt Regulations did apply to the Fund, with the Church being a participating employer for those purposes and so under an obligation to pay a debt (should it crystallise on a cessation event). On the calculation of contributions, the PO noted that the request for the Church to contribute was a voluntarily offered alternative to the 'far less palatable' certified debt which was strictly payable. The Church was free to take or leave the offer.

The PO's key finding in this case was that the Trustee (and indeed the Union) were not obliged to notify the Church of what its statutory obligations were or could be at a future point. However harsh it may seem, the primary responsibility of knowing its obligations lay with the Church. Although the PO's decision against the Church was based on many case specific facts, his confirmation of the onus being on the employer to make itself aware of its statutory obligations (and it not being on the trustees to inform it) is helpful for trustees and a reminder to employers that it is prudent to seek advice to be aware of their legal obligations, so that they can take any action felt necessary in the light of this.