In the recent case of Capital Cranfield -v- Beck the court was asked to determine whether the scheme had validly equalised NRD in accordance with the rules. The validity of the purported equalisation in 1994 and consequently the extent of the buyout deficit would determine whether the scheme might ultimately enter the PPF.

The scheme rules originally defined NRD as being the day before a member’s 60th birthday for women and 65th for men. In 1993 an amendment was introduced allowing NRD to be “such day as the Employers shall determine in any particular case and notify in writing to the Member concerned”. Following the ECJ decision in Coloroll, the principal employer, as sole trustee, issued an announcement to members purporting to equalise NRD at age 65 for both men and women from 17 November 1994.

The power of amendment permitted amendments to be effected by writing under hand. It was common ground that the announcement had not been “under hand”, as it had not been signed. The court was then asked to determine whether the announcement was a “determination of the employers” within the meaning of the definition of NRD. The court held that:

  • the announcement was stated to be from one employer only, not “the employers”
  • that employer made the announcement as sole trustee
  • in any event the announcement did not constitute a determination in relation to a “Member concerned” in “any particular case” but an alteration of the scheme rules
  • the final limb of the definition of NRD could not be used to avoid the restrictions on the power of amendment (furthermore, the latter was exercisable by the trustees with principal employer consent)
  • even if the definition of NRD conferred a power on the Employers to equalise NRDs generally for the Members, that power was not validly exercised by the announcement
  • therefore the purported equalisation was ineffective.

This decision meant that the “Barber window” remained open, giving all members an NRD of 60 and a likelihood that the scheme would now go into the PPF.