In MCP Pension Trustees Ltd v Aon 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.

The 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.

In 1996, 32 members had been transferred into the scheme, but the loss of their records meant that they were overlooked when the scheme was wound up in 2003. On winding-up, the trustee had taken out insurance cover for missing beneficiaries and issued advertisements under section 27 Trustee Act 1925. Section 27 allows trustees who have issued the necessary advertisements to distribute trust property only to those persons of whose claims they have notice at the time of distribution. Because none of the 32 members in question responded to the advertisements, Aon argued as a preliminary issue that the trustee had no notice of their claims and therefore no liability towards them after the winding-up. If this was correct, there would be no insurance claim which Aon could be required to reimburse.

The High Court disagreed. It held that the trustee was aware of the transfer in 1996 and therefore it did have notice of these members for the purposes of section 27. Whether those members had responded to the advertisements was therefore irrelevant, as was the fact that by 2003 the trustee had forgotten the existence of those members. The trustee was therefore liable to the missing beneficiaries.

Section 27 Trustee Act 1925

This section protects trustees: if they have placed notices in appropriate publications asking for potential beneficiaries to come forward, they may distribute the trust assets only to those beneficiaries of whom they have notice at the time of distribution without liability towards anyone of whose claim they had no notice at that time.