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Actuaries fear legal action on pension advice

The Institute and Faculty of Actuaries fears its members could face a raft

of legal action over changes made to pension schemes under the Pensions Act

1995.

It follows a decision by the institute to seek “opinion from counsel” over

Section 67 of the Pensions Act 1995, that it sees as a grey area open to

different interpretation.

The section requires pension scheme trustees to obtain members&#39 permission

or an actuarial certificate for any changes made to a scheme which could

adversely affect a member&#39s entitlement to benefits.

But the institute fears that by issuing such certificates, actuaries could

leave themselves open to future legal action from either scheme members or

trustees.

Because there is no clear-cut interpretation of the rules, actuaries are

concerned that, in future years, trustees or members may judge the changes

to have adversely affected them, forcing them to seek redress in the

courts.

In many cases, the decision could be open to opinion, thus rendering the actuary open to legal action.

Scottish Equitable pensions development director Stewart Ritchie says:

“There has been problems with this section from the start as it has been

difficult to pin down a clear interpretation of the rules. Actuaries are

concerned that they could give an opinion in good faith which later turns

out to be challenged in the courts.”

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