LEGAL ACTION is finally to be taken against the trustees of the failed pension fund at Scottish consultant Blyth & Blyth, it was confirmed this week.
The final salary scheme fund was wound up in November 2002 shortly after a major deficit was discovered leaving most of the firm's employees with no pension (NCE 23 January 2003).
Summonses were due to be served this week against three former directors of the firm who served as pension fund trustees, and the scheme actuary which advised the fund on its investments.
The actuary, formerly Buck Consultants and now Mellon Human Resource & Investor Solutions (Actuaries & Consultants), and the three directors have already received 'intimations' of the claims. These are formal pre-summons warnings required in Scottish Law.
PS Independent Trustees, which was appointed as statutory independent trustees when Blyth & Blyth went into receivership some weeks later, said that the action was the first ever in the UK to hold trustees liable for a large part of a pension deficit.
The action will attempt to recover losses to the fund and reverse three early retirement decisions.
Two of these decisions relate to the former directors.
Preference is given in law to those already in retirement if there are insufficient reserves in a pension fund to pay everyone in the it.
The consultancy itself was put into receivership in early January 2003, partly because of the liabilities incurred at the pension fund which ran to several million pounds.
After a short interval - a three day deadline was allowed for prospective bidders - it was bought by a group comprising several of the existing managers.
The new consultancy, renamed Blyth & Blyth Consulting, is able to trade without incurring commitments to fund payment shortfalls in the pension fund.