Introduction

In Safeway Limited –v- (1) Andrew Newton (2) Safeway Pension Trustees Limited [2016], the High Court ruled again that European Union law prevents the retrospective levelling down of pensions (by increasing the Normal Pension Age (NPA) of women to 65), even where such an amendment was:

  • permitted by the rules of the scheme; and
  • made after section 62 of the Pensions Act 1995 (PA 95) came into force.

Facts

A written announcement (dated 1 September 1991) was circulated to members and claimed to introduce a common Normal Pension Age of 65 from 1 December 1991. The scheme’s rules allowed for this amendment by supplemental deed, with such changes taking effect from ‘the date of such Deed or the date of any prior written announcement.’  The Supplemental Deed was then executed on 2 May 1996 (1996 Deed).

The Court was asked whether the Supplemental Deed was effective in retrospectively equalising NPAs at 65 with effect from 1 December 1991. 

Judgment

Effect was given to article 119 of the Treaty of Rome (principle of equal pay) in domestic law by sections 62 to 65 of PA 95 which came into force on 1 January 1996.

Warren J concluded that the 1996 Deed was ‘part and parcel of a set of arrangements introduced because of, and designed to give effect to, the equal treatment requirement under article 119.’ Therefore, section 62 of PA 95 does not ‘provide Safeway with an escape from the consequences of article 119.’ 

In reaching this decision on section 62, Warren J drew upon his decision in Harland & Wolff Pension Trustees Limited [2006], where he had considered whether it would be possible effectively to level down benefits in two steps by:

  • first of all reducing the NPA of men to 60; and
  • then raising it to 65 for both men and women.

Where the second amendment was made shortly after the first, Warren J said that English law would view the two transactions as one.

Warren J concluded that, ignoring the impact of section 62 of PA 95, the 1996 Deed was not effective to introduce a common NPA of age 65 for men and women for the period from 1 December 1991 to 2 May 1996. The result is that both men and women are entitled to benefits in respect of that period based on an NPA of age 60.

Warren J’s other comments in the judgment are also of note. Although the scheme had been administered on the basis that the announcement had altered NPAs from 1 December 1991, there was evidence to suggest that the announcement informing scheme members of the change was not in fact distributed until 2 December 1991. Nor could it be said with certainty that every single scheme member had received the announcement. 

Permission to appeal has been granted on the issues of Harland & Wolff, and section 62 of PA 95.

Please see the full judgment dated 29 February 2016 here.