Pension trustee seeks €16m

A pension fund trustee is seeking a €16 million summary judgement order in the Commercial Court against a company which sells a variety of products on credit in a dispute over a defined benefit pension scheme.

Pension trustee seeks €16m

The Ray Murray Group Pension Scheme Ltd is the trustee of the scheme for employees of Marlboro Trust (Retail) DAC, an Irish-owned company based in Mayfield in Cork City.

Marlboro is a nationwide credit company selling clothes, jewellery, hardware, electrical and furniture goods to people in their own homes and providing interest free credit in doing so.

The pension scheme was established in 1967 and has 74 active members, 29 deferred members and 26 pensioner members.

The trustee is seeking judgement following a notice from Marlboro of termination of liability.

In an affidavit, Philip O’Sullivan, a director of the pension scheme company, said in June 2013, the trustee submitted an application to the Pensions Authority for an order to reduce accrued benefits together with a fund proposal designed to enable the scheme meet minimum statutory requirements by 2023.

The authority approved the application and the annual employer contribution payable was 20.5% of salaries, along with a 7.5% employee contribution rate, Mr O’Sullivan said.

The actuary in this case advised last August the contributions payable were no longer adequate to meet minimum statutory funding requirements by December 2023.

That required an increased employer contribution to 34.5%, or alternatively, a cash injunction of €3.5m in conjunction with the current 20.5% employer contribution. Marlboro later issued its notice of termination.

The scheme actuary recommended that a payment of €16m was necessary.

The trustee made a demand for payment and Marlboro said it intended to cease employee deductions to the scheme from December 30, 2016.

Exchanges took place between the parties but no amicable resolution was reached, Mr O’Sullivan said.

As result, the trustee commenced proceedings seeking a declaration Marlboro was obliged to pay sums determined to be necessary to maintain the scheme. Judgment for €16m was also sought.

The case was admitted to the Commercial Court list by Mr Justice Brian McGovern and adjourned to July for further directions on how to proceed.

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