S27 of the Trustee Act 1925 protects trustees from claims from unknown claimants who may appear after a scheme has been wound up, so long as the trustees have advertised in the London Gazette and local newspapers asking any potential claimants to come forward. However, in a recent legal case, MCP Pension Trustees Ltd v Aon Pension Trustees Ltd, the High Court has determined that trustees do not have protection from claims if they already had notice of them.
In this particular case, although 32 people were transferred into the Maxwell Communication Works Pension Scheme in 1996, the administration records, at date of wind up, did not contain details of these members which resulted in their benefits not being secured. The Trustees of the Scheme had advertised in accordance with S27 before securing benefits. However none of these 32 members responded to the advertisement.
This case makes it very clear that the protection under S27 is limited – trustees are not protected from claims by members whose names just happen to have been omitted from their records for some reason. On a serious note, trustees will become exposed to future claims once a scheme has been wound up if administration records have not been kept in good order. A compelling argument to start auditing your membership records sooner rather than later !