Bonas Concluded

Len Fawke — Wed, 15 Jun 2011 15:59:58 GMT

In what might be regarded as a climb down, the Pensions Regulator issued a Report under Section 89 Pensions Act 2004 on 9th June 2011 that it had settled proceedings with Michel Van de Wiele NV (VDW) by agreeing that a Contribution Notice be issued to VDW in the sum of £60,000.

This has of course denied us the benefit of a hearing by the Upper Tribunal of the substantive issues of disagreement between the Pensions Regulator and VDW, the former seeking to issue a Contribution Notice to VDW of circa £20 million.

The important question of what it is reasonable to seek by way of a Contribution Notice is therefore still unresolved leaving a gaping hole in the understanding of what the purpose of the legislation was, to protect or to punish?

The S89 Report is in the writer’s view extremely bullish as the Regulator seeks to protect and justify its view of the intention of the legislation and the extent of the detriment caused to the pension scheme justifying the size of the Contribution Notice the Regulator seeks to issue in a particular case.

Clearly it intends to seek to issue significant Contribution Notices in size irrespective of the detriment caused to the Scheme by the action complained of and whilst Warren J’s observations are undeniably ‘obiter dicta’ and accordingly not binding on future decisions, it was clear his observations were not restricted to the specific circumstances of this case.

Admittedly he did leave the door open for the issue of Contribution Notices greater than the detriment caused to the pension scheme although he did say he couldn’t immediately think of any such circumstances. This would have been something addressed at a full hearing of the Bonas case by the Upper Tribunal. A hearing we will now sadly be denied.

The S89 Report also refers to the changes to the moral hazard powers introduced by Pensions Act 2008 which introduced the concept of ‘material detriment’.

These changes were however to make the use by the Regulator of its moral hazard power easier and not in the writer’s view to address the question of the quantum of any Contribution Notice.

What is reasonable is still the test and whilst there is no guidance on this other than the ‘obiter dicta’ of Warren J in the Bonas case, it must be obvious that the Courts will have a significant say on this to avoid the Regulator being Judge , Jury and Executioner.

Begbies Traynor Hires Former Pensions Regulator

uat — Thu, 15 Oct 2009 16:38:00 GMT

Begbies Traynor, the UK’s leading business rescue, recovery and restructuring specialist, has appointed Len Fawke to lead the BTG Pensions Advisory team. The team will oversee the delivery of pension advisory services to trustees, employers and other stakeholders with an interest in pension scheme issues. Len, who is based in Leeds, was Head of Scheme Specific Funding at the Pensions Regulator throughout 2007.

During his 30 year business career in Yorkshire, Len spent 16 years as a Partner in PricewaterhouseCoopers leaving in 2001 to take up the role of Chief Financial Officer of Australian Wool Services (formerly The International Wool Secretariat).

A prominent member of the Leeds business community, he was a Director of the Leeds Chamber of Commerce and Industry from 1984 to 2001. Len was also a founding Director of Business Link Leeds as well as serving on the executive of the Association of Yorkshire and Humberside Chambers of Commerce.

He joined the Pensions Regulator immediately prior to the first major deadline for the submission to it of Recovery Plans addressing how defined benefit pensions deficits were to be eliminated and was instrumental in implementing the Regulator’s approach to risk based regulation. During 2007 nearly 2000 such recovery plans were submitted to the Regulator.

Immediately before joining Bebgies Traynor, Len was a senior member of Grant Thornton’s National Pensions Advisory team.

Ric Traynor, Executive Chairman of Begbies Traynor Group plc commented: “Begbies Traynor has always delivered these services to our clients but we have now formalised this by recruiting Len to head up the team and focus all of our internal resource and expertise together with a targeted recruitment programme. I see a lot of client need in this area and I am confident that Len and his team can provide quality advice at a sensible cost.”

The BTG Pensions Advisory team will be actively involved in the undertaking of covenant assessments and independent business reviews for scheme funding negotiations; assessing the impact on employer covenant of proposed corporate transactions, group reorganisations, restructuring and refinancing; issues arising from scheme related events such as closures, buy-outs; and other liability limiting proposals.

Commenting on his appointment and role, Len Fawke said: “The work my team and I undertake for clients is increasingly important and the team is perfectly positioned to respond to the growing demand. I have been involved in the pensions sector for many years and joining Begbies Traynor provides me with a great opportunity to further establish and grow our reputation.”

BTG Pensions Advisory News

Bonas Concluded

Begbies Traynor Hires Former Pensions Regulator