A recent case has highlighted the risk for lenders relating to the historic involvement of borrowers in a defined benefit pension scheme. A court decided in February 2015 (in a case relating to the Merchant Navy Ratings Pension Fund) that the liability to pay the shortfall in that scheme could be redistributed to companies and businesses that were no longer involved in the scheme and which had paid outstanding debts into the scheme when they left. This has meant that some businesses have found themselves, without their agreement, required to make significant and ongoing contributions into a pension scheme which they had left some years before.

This case highlights the need to investigate whether companies within the borrower's security structure had an involvement with a scheme with a deficit because liabilities can now be imposed later.

Merchant Navy Ratings Pension Fund Trustees Limited v Stena Line Limited