EWHC 185 (Ch)
The contributions rule in the Alitalia pension scheme required the employer to pay contributions “to secure the benefits under the scheme.” The trustees argued that the word “secure” meant the scheme’s assets had to be sufficient to meet its liabilities by buying annuities i.e. that the scheme required buyout funding so that benefits would be available if the scheme were wound up. The employer argued that the funding objective was to safeguard and protect the members’ benefits and did not require the scheme to be funded on a particular basis.
The High Court held that the trustees of the Alitalia pension scheme were not entitled to demand employer contributions calculated on a buyout basis but on whatever method best suited the changing circumstances of the scheme.