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Pension scheme & benefit plan case studies
Chubb Specialty Insurance
Here are a few examples of why you may need our pension scheme and benefit plan liability insurance.
Stock market rise
After the sale of a company subsidiary, the pension trustees were tasked with transferring the funds into a new pension fund.
According to the rules, the amount sent over had to be such ‘as the trustees, after consulting with the actuary, decide to
be just and equitable’. They consulted the actuary but before the transfer date the value of the fund was enhanced by a strong
stock market rise. The trustees did not take this into account and were subsequently sued by the scheme members.
Borrowing from the fund assets
When a newly acquired subsidiary came into financial difficulties, the directors and scheme trustees of a private company
borrowed funds from the pension scheme to help the subsidiary out. The loan was repaid in the form of shares in other group
companies. The value of these shares subsequently plummeted and the scheme beneficiaries were sued for fraud, maladministration
and a £3million shortfall.
An employee, on redundancy, was entitled to have his pension transferred out of the company scheme. The professional administrators
and assisting trustees gave the employee late and inadequate information regarding this. The error and delay, compounded by
stock market movements, constituted maladministration.