The UK High Court (the “Court”) in Safeway Ltd v Newton and another rejected an employer’s application for a declaration that normal pension age (NPA) in its defined benefit (DB) scheme was equalised at 65 for men and women by virtue of announcements to members made in September and December 1991.  A formal rule amendment was not made until a new definitive deed was executed on 2 May 1996, but equalisation was expressed to have taken effect from 1 December 1991. 

The question for the Court was whether the NPA had been equalised at age 65 with effect from 1 December 1991 or only from 2 May 1996. 

The parties agreed the outcome turned on two key issues: 

1. whether the 1991 notices were effective to equalise NPA, having regard to the terms of the power of amendment in the scheme rules; and
2. whether EU law precluded retrospective amendments being made in 1996 equalising NPA.

The Court held that the power of amendment contained in the scheme rules required a deed to be executed to make any amendment to those rules.  In the absence of an amending deed, if a male member had claimed between 1 December 1991 and 2 May 1996 that he was entitled to an NPA of 60 as of right, he would have had a good claim.  The Court rejected the submission that the trustee was entitled to operate the scheme in the period up to 2 May 1996 on the footing that NPA had been equalised, pending a formal amendment. In doing so, the trustee was acting contrary to the scheme rules.  The Court further found that benefits could not be retrospectively levelled down.

We understand permission to appeal to the UK Court of Appeal has been granted.

Comment