This case concerned a final salary scheme which was placed into winding-up on 23 May 2000. The scheme had a deficit of approximately £10 million and the trustee of the scheme sought direction from the court as to the order of priority of the application of the scheme’s net assets under Section 73 of the Pensions Act 1995.

The High Court decided that, where a member has an entitlement to a pension benefit under pension scheme rules and the entitlement to that pension may be completed by taking steps lying entirely in the member's own power, that entitlement has arisen within the meaning of Section 73(3)(b) of the Pensions Act 1995 (as it then was). It was not necessary for the member to have satisfied all conditions for entitlement at the winding-up date.

It should be noted that Section 73 was amended extensively by the Pensions Act 2004 with effect from 6 April 2005. Therefore, this decision is likely to be of significance only to schemes being wound up in deficit and where the winding-up process began between 6 April 1997 (when section 73 originally came into force) and 6 April 2005 (when a substantial amendment to Section 73 effected by the Pensions Act 2004 took effect).

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