Winding Up Notice
The British Regional Airlines Group Pension Scheme (the “Scheme”)
Re Wind Up Announcement Number 1 – May 2020
Wind Up Notice
Commencement of wind-up
The Trustee has exercised its power under the Trust Deed and Rules to trigger the wind-up of the Scheme and the wind-up commenced on 1 May 2020. The wind-up was triggered by the Trustee due to Flybe Limited (“Flybe”) no longer being able to meet its funding obligations under an agreed schedule of contributions owed to the Scheme and by the subsequent failure of Connect Airlines Limited to meet its obligations under a guarantee to make good any default by Flybe in that regard.
What does winding up the Scheme mean?
Winding up is the process by which the Trustee uses the assets of the Scheme to secure benefits for members in accordance with legislation and the Scheme Rules. In this situation, it is usually the case that the Trustee will sell all of the Scheme assets and use the sale proceeds to buy an insurance policy for each member. The policy will provide the benefits due to the member and his or her family and dependants. The policy is then ultimately transferred to the relevant member and, once all members have been assigned their policies, the Scheme can be wound up.
Before this transfer can be achieved, the Trustee must resolve any uncertainties about members’ benefits and data as far as possible and this is likely to take some time to achieve. As there is not enough money to secure all benefits, those benefits have to be reduced as prescribed by law. The Trustee must then obtain the best price they can for the sale of the Scheme assets and negotiate the best terms that they can for the purchase of the insurance policies, the cost of which fluctuates continually. It is likely that the whole wind up process will take many months, possibly years to complete. At this stage, it is not possible to provide an accurate estimate of the extent to which benefits are likely to be reduced at the end of the process. The changes to benefits currently in payment are based on what the Trustee’s advisers can estimate at this time. Any necessary adjustments to reflect the final position will be made at the appropriate time.
The Trustee is also considering other options for securing Scheme benefits on favourable terms (for example a transfer to a well resourced institutional pension scheme) but will only proceed with such alternative if to do so is deemed in members’ interests and compatible with UK and/or Manx law as applicable.
Owing to the administration of Flybe, we are required to inform you that at least one of the Trustee directors must be an independent person (as prescribed by law). The Trustee confirms that the majority of the board of directors satisfy this requirement and also qualify as independent for the purposes of Isle of Man regulatory requirements.
The Trustee will, in due course, be placing legal notices in the UK and the Isle of Man that are intended to trace any unknown members or beneficiaries of the Scheme. If you personally and directly received a copy of this letter then you do not need to respond to the notices, as the Trustee will already have your details.
However, if you are aware of other members or beneficiaries of the Scheme who may not have received this information – for instance because they have changed address – please ask them to get in touch with the Trustee as soon as possible by email to email@example.com
If you change your address or if the address we are writing to is not your residential address and instead you reside outside the UK or Isle of Man, you should let the Trustee know your updated address. We have provided contact details in the next section.
Queries and contact details
If you have any queries about your benefits or if you require any further information, at the current time you should address them in writing to Mercer at firstname.lastname@example.org
If you are unable to make contact via the above email address, you may contact the Scheme at:
British Regional Airlines Group Pension Scheme
No 4 St Paul’s Square
Old Hall Street
Please note that contacting the Scheme by post may result in a longer response time. Therefore, it is preferred that the above email contact is used where possible.
BRAL Trustees (IOM) Limited (Trustee of The British Regional Airlines Group Pension Scheme)
22 May 2020
This letter is issued in accordance with the applicable legislation (Section 74 of the Pensions Act 1995 and regulations thereunder, the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 and equivalent Isle of Man provisions).