Forms Fit For Purpose?
Is the RP15 insolvency form fit for purpose? An issue sprouted recently that Our CEO, Elliot Green has had cause to grapple with, the fascinating matter of the RP15 Declaration.
Pension Claim Form RP15
What Is Pension Claim form RP 15?
Pension claim form RP15 is a form that applies when a pension administrator can claim on behalf of a Pension Scheme for sums due from the insolvency. The pension administrator will submit the RP15 to the Insolvency Practitioner who will then be asked to verify the information set out in the form.
Buried deep down in the Pension Schemes Act 1993 is a procedure in respect of certification by the Insolvency Practitioner in relation to such sums claimed, ultimately from the Redundancy Payments Service (“RPS”).
Section 125 of the Pension Schemes Act 1993 has two ways in which the procedure can be addressed.
Standard Section 125(3) Procedure
Section 125(3) of the Pension Schemes Act 1993 says:
Subject to subsection (5), where this section applies the Secretary of State shall not make any payment under section 124 in respect of unpaid relevant contributions until he has received a statement from the relevant officer of the amount of relevant contributions which appear to have been unpaid on the date on which the employer became insolvent and to remain unpaid; and the relevant officer shall on request by the Secretary of State provide him as soon as reasonably practicable with such a statement.
So the RPS will not pay out on a claim by a pension administrator without a “statement” from the Insolvency Practitioner.
Alternative Procedure In Section 125(5)
The alternative procedure set out in Section 125(5) of the Pension Schemes Act 1993 says:
If the Secretary of State is satisfied—
(a) that he does not require a statement under subsection (3) in order to determine the amount of relevant contributions that was unpaid on the date on which the employer became insolvent and remains unpaid, or
(b) that he does not require a certificate under subsection (4) in order to determine the amounts payable, paid or deducted as mentioned in subsection (3)(a) or (c) or (5) of section 124,
he may make a payment under that section in respect of the contributions in question without having received such a statement or, as the case may be, such a certificate.
In other words, there is provision for a payment to be made if the Secretary of State (who for all intents and purposes will be the RPS) is satisfied that the “statement” is not required from the Insolvency Practitioner.
What Is The ‘Statement’ From the Insolvency Practitioner?
The Statement from the Insolvency Practitioner in form RP15 as currently organised is a “Declaration” which is preceded by a series of statements saying “I confirm …“.
In the context of the scenario in which many insolvency appointments operate the following might be worthy of consideration. Described by Mr Justice Slade in the case of Re Castle New Homes Limited [1979] 2 All ER 775:
“… the liquidator usually takes office as a stranger to relevant events.”
Furthermore, throw in the fact that many insolvency appointments will involve incomplete company records, the matter of making a ‘declaration‘ might become clearer as a potential problem.
Declarations are potentially serious matters. They are relied upon. Furthermore, the discrete declaration has within it the following:
“The information given in this form is correct and compete [sic] to the best of my knowledge;“.
That appears to raise the curious question about whether such a declaration is necessarily appropriate in each and every case, particularly as there can be so many instances when an Insolvency Practitioner has little or no direct knowledge of their own. It is worth remembering that even if an Insolvency Practitioner has company records, he or she did not create them and has no first-hand knowledge of them. Is it, therefore, appropriate to expect an Insolvency Practitioner to issue declarations (even caveated ones) that are to be relied upon and which have their roots in the integrity of such company records that an Insolvency Practitioner has had no historic role?
A declaration appears more consistent with an assertion of accuracy as opposed to reliance upon a statement caveated by very limited direct knowledge.
The Approach Of the Redundancy Payment Service
We have raised this anomaly with the Redundancy Payment Service who said the following:
Section 125 of the Pension Schemes Act 1993 states that an office holder shall, on RPS’s request, provide a statement confirming details of the missing pension contributions, and that RPS can refuse to make a payment without it. We are reviewing how the process for making a pension claim operates, and we are aware that our forms could be improved. However, the current system operates as follows:
- The pension provider makes their claim on Part 1 of the RP15, and the office holder provides verification in Part 2 of the RP15.
- Either the pension provider or the office holder then sends the completed form to the RPS, along with the form RP15A which provides supporting evidence of the claim. A RP16 should also be provided where the scheme is a defined benefits or hybrid scheme.
- The RPS will then review, calculate and process the claim, making any payment to the pension provider.
Where an office holder refuses to provide verification relating to the pension claim, the RPS will reject the claim. The pension provider may then challenge the RPS’s rejection of the claim and the office holder’s refusal to provide verification of the claim. Potentially the tribunal could then make a finding that contributions are payable. Costs may be awarded against the officer holder or insolvent estate, if it is found that the office holder unreasonably failed to provide verification. The tribunal could alternatively find that the pension provider ought to have provided further detail in their claim, and could award costs against the pension provider.
So it appears notwithstanding that the RPS is aware that their forms could be improved they have a procedure of automatic rejection where an Insolvency Practitioner does not provide the declaration and he or she could potentially suffer adverse costs.
Oliver Elliot Comment: Fit For Purpose?
Having raised this issue on more than one occasion and although the RPS has said if their form is not deployed then the claim will be rejected, in our experience, a slightly softer line can be found.
After a recent matter was escalated to the RPS technical team the following position was outlined:
We would be happy for you to complete and sign the RP15 ‘to the best of your knowledge, ability and belief’ rather than declaring that the information is correct.
Providing you can complete the entire RP15 with all the relevant info included (to the best of your ability), then the RPS will accept the form and process the pension payment.
If however, you are unable to fully complete the form due to lack of information, then it is current RPS policy to reject the claim.
An IP is in no position to sign the form if he is unsatisfied with the information he has available to him at the time and no compensation would be sought by claiming parties against the office holder just because of lack of evidence.
It is understandable that the IP enters office as a stranger where in a lot of instances the company records are incomplete and there should be no concern with signing off as long as the statutory form can be fully completed to the best of your knowledge.
However, this seems to highlight further need for the wording of the RP15 to be updated. It seems unclear as to the purpose behind the Insolvency Practitioner who may know little or nothing, then attesting at some level to the accuracy of a claim (via a declaration to be relied upon) for the appropriation of public funds.
Watch this space!
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