The much awaited decision in the IBM case (IBM United Kingdom Holdings Ltd v Dalgleish and others  EWHC 980 (Ch)) was delivered in the High Court shortly before Easter and found that the employer has acted contrary to its duty of good faith when closing certain of its final salary pension arrangements to future accrual. The case is an important articulation of what that duty of good faith means in terms of employer behaviour and also explores other important areas which employers should be aware of - e.g. what does consultation mean in a pensions context?
Shortly after, judgment was delivered in the High Court in the second case (Christopher James Briggs v Gleeds ( Head Office) (a firm)  EWHC 1178 (Ch)) which relates to the defective execution of certain pension scheme deeds by an employer (a partnership) which rendered ineffective the purported changes under those deeds. The changes covered by those deeds were significant (e.g. the closure to future accrual). This case is an important lesson in ensuring that documents are executed properly and in accordance with legal requirements; however, it also sheds light on a number of other key legal areas which the employer's lawyers tried to argue meant that the changes in the defective deeds were effective anyway (arguments which, on the whole, did not succeed).
The final case (Honda Motor Europe Limited v Powell  EWCA Civ 437), a Court of Appeal decision, relates to where an employer ('the Adhering Employer') adhered to the Honda UK Pension Scheme ('the Scheme'), with the intention that its employees should receive benefits which were inferior to the benefits provided to existing Scheme members. However, that was only expressed in an announcement to the Adhering Employer’s employees at the time - the Scheme rules were only amended to reflect the inferior benefit structure for these employees twelve years later. The Court of Appeal found that the employees of the Adhering Employer are entitled to the same benefits as the existing scheme members in the twelve years between the Adhering Employer adhering to the Scheme and the Scheme rules being amended, and not the inferior benefits that were set out in the announcement. Again, this case highlights the perils of defective documentation but also explores other legal arguments that were put forward to try to achieve what was argued to have been intended in relation to the Adhering Employer's employees, none of which succeeded.
All three cases will be explored in more detail in our next edition of Pension Pieces.