In April 2010, the Determinations Panel of the Pensions Regulator recommended that the Regulator should issue a contribution notice (CN) in an amount exceeding £5 million against Michel Van de Wiele NV (VdW), the Belgian parent company of Bonas UK Ltd. Bonas was the sponsoring employer of the Bonas Group Pension Scheme until being sold under a pre-pack administration, thereby dumping the Bonas scheme in the PPF (see Legal update, Pensions Regulator imposes first contribution notice).

In the event, the CN was not issued as VdW applied to the Upper Tribunal (Tax and Chancery Chamber) and asked for the determination to be struck out.

The strike-out application was unsuccessful, but in giving judgment Warren J suggested obiter dicta that the amount specified in the proposed CN was excessive. He commented that the amount specified should simply compensate the scheme for the detriment suffered following an act or omission that prevented the trustees from recovering an employer debt (see Legal update, Bonas: Upper Tribunal criticises contribution notice amount and clarifies determination procedure).

On 9 June 2011 the Regulator announced it had settled its dispute with VdW and issued a CN in the amount of £60,000. In a formal report issued under section 89 of the Pensions Act 2004, the Regulator confirms the compromise but largely rejects the Tribunal's analysis of the amount that should generally be specified in a CN.

In particular, the report claims that Warren J's comments reflected the particular facts of the Bonas case and that Warren J did not mean "to restrict, in all cases, the amount of a CN to the detriment suffered by a pension scheme which could be demonstrated to be caused by the specified act or failure to act". In any event, the report suggests this is not how the Regulator intends to approach other current or future cases.

Sources: Pensions Regulator: Contribution notice - Bonas Group pension scheme (8 June 2011), Pensions Regulator: Determination notice - Bonas Group pension scheme (8 June 2011), Pensions Regulator: Regulator confirms contribution notice (9 June 2011) and Report under section 89 of the Pensions Act 2004 (June 2011).