The High Court has said that scheme contribution rules may “survive” the statutory funding regime (“SFR”). This suggests that, under some schemes, liability could be imposed upon the employer via the rules, over and above any liability which the employer might have under the SFR.
The Court had been asked various questions about funding obligations under an industry-wide scheme for marine pilots. The scheme has a high proportion of self-employed members. The Court held that the self-employed members were not “employers” for the purpose of the SFR or the employer debt legislation. The responsibilities of organisations which were employers would extend to any deficit in respect of the self-employed members.
Most schemes have no self-employed members, so this point is not of wide significance. But, more interestingly, the judge returned to a point which he had previously made in the British Vita case. He said that in his view the SFR did not completely override scheme contribution rules. An employer might in principle be required to pay sums under a scheme contribution rule on top of any sums due under the SFR.
The judge’s comments were not legally binding, but could be relevant to schemes whose rules allow the trustees or the actuary to set contributions without the agreement of employers. The trustees or actuary may be able to use their powers so as to require employers to pay contributions beyond those due under the SFR. The powers might also be used so as to require contributions from “former” employers who, though no longer liable under the SFR, had not got themselves off the hook for the purpose of the rules.