Capita ATL Pension Trustees Ltd & Anor v Gellately & Ors [2011] EWHC 485 (Ch) involved an application by the scheme trustees to the court for directions in relation to a scheme whose amendment power gave the scheme's principal employer a power to amend the definitive deed by deed and the rules by board resolution or by deed; in either case, the trustees' consent was required to the amendment.

Although the scheme was established after Barber, it still had different retirement ages for men and women. The effect of the definitions of Minimum Pension Age (MPA) (the date from which members could take an unreduced pension) and Normal Retirement Date (NRD) in the scheme Rules was that MPA could be either 60 or 62, depending on the member's sex and employment history, and NRD could be either 60 or 65, again depending on the member's sex and employment history, but subject also to the qualifying words "except where otherwise stated or otherwise agreed by the Employers and the Trustees."

In December 1995, an attempt to equalise NRD for all members was made by way of an announcement to members that NRD would be 65 for all members (with no MPA) from 1 February 1996. Members were asked to sign and return a slip confirming that they understood and consented to the changes. The changes were not incorporated by deed until 2003.

Power to agree a different NRD in the definition of NRD was restricted to making changes for individual members

Mr Justice Henderson disagreed with the trustees that the power in the definition of NRD conferred a separate and free-standing power to alter NRD for the scheme without complying with the formal requirements of the power of amendment. Where a scheme-wide amendment to the rules is in issue, he said that certain formalities have to be complied with, and it is in the scheme's amendment power that those formalities are found. The power in the definition of NRD was construed to being confined to "special arrangements made in relation to individual members".

Announcement did not create a binding contract with members nor was there "estoppel"

As to the argument whether members who signed and returned the acknowledgement form accompanying the announcement were bound by its terms, either by contract or estoppel, it was held that there was no contract binding the members to the changes: the announcement was a step to telling members about the changes to the scheme which would later be implemented by amendment. The estoppel argument also failed for similar reasons – the only representation members made by signing and returning the form was that they understood the preliminary information in the announcement and agreed to the necessary deduction of contributions in the new amount if and when the scheme was validly amended. As no valid amendments were made, there was no detrimental reliance (necessary for an argument of estoppel to succeed) on the announcement.

Implications

Although the case relates to a power in the definition of NRD, we consider that the courts may reach a similar decision in relation to other powers in scheme rules, such as an attempt by an employer to close a scheme to future accrual by exercising a power in the eligibility rule for the employer to prevent a person or a class of persons from being eligible for membership of the scheme.