Ineffective Scheme Wind-Up: A Cautionary Tale For Pension Trustees

The recent High Court case of O'Rourke v Meadowvale Pension Scheme [2023] IEHC 148 (the Case) found that a deed purporting to wind-up a pension scheme over a decade ago was not legally effective.

The trustee had failed to properly transfer certain assets out of the scheme before attempting the wind-up, so the trust (and trustee obligations) continued.

The Case concerned a small, self-administered pension scheme. The main assets of the scheme were shares in a private company registered in South Africa. The trustees sought to transfer those shares to a PRSA before the purported wind-up. All parties accepted that the transfer of part of the shares was not valid and effective, as it did not follow the restrictions in a shareholders' agreement. The High Court had to decide if these assets remained in the hands of the trustees or if they would revert to the employer or the State.