A Claim Against Trustee For Pension Arrears

Typical pension schemes operate by way of a Trustee managing the pension and payments are made to the beneficiary in accordance with the rules of the scheme. It is the Trustee’s duty to ensure the beneficiaries of the policy receive the amounts due and in the event, the payments fall below the amount due, the Trustee will be held liable.

In reality, many people choose not to dissect the figures and will agree to the amount they are told they would receive, which can lead to incorrect payments being missed. It was thought this may create an issue in that once the shortfall was noticed it may be outside of the limitation period to claim the arrears due. This was recently considered in the case of Punther Southall Governance Services Ltd v Hazlett.

Punther Southall Governance Services Ltd v Hazlett

Case background

In this case, the Court considered the recovery of underpaid pension outside of the six years and held this was an action to recover Trust property and, therefore, no statutory limitation period applied. A claim against a trustee for compensation, however, is subject to a limitation period of six years, as, in this instance, the beneficiary would not be seeking the recovery of Trust property.

Beneficiaries noticing they have been underpaid should, however, review the pension scheme before bringing a claim. Many pension schemes will include forfeiture clauses which mean a beneficiary will forfeit their right to recover underpayments after a set expiry date. The Court in Punther Southall Governance Services Ltd v Hazlett confirmed such clauses are enforceable providing they comply with Section 92 of the Pensions Act 1995.