Will the extent of an Employer's duty of good faith in the pensions context be settled? Will the CPI/RPI debate be resolved? Will there be any overriding measures to help employers? Below, we highlight key cases and issues the Courts are tackling this winter and into 2017.
Does past discrimination linger on?
Should survivor pensions be granted to civil partners if civil partnerships were not recognised when the pension was earned?
In Innospec Ltd v Walker, the Court of Appeal decided that while equality laws and social attitudes have progressed, if pension benefits were accrued before civil partnerships were introduced in 2005, equal rights will not apply to those pensions.
The case went to the Supreme Court in November 2016 so a judgment in the New Year will bring further clarity on this area of potential discrimination.
Equality and marital status
Unmarried partners still need to nominate partners before they qualify for a survivor’s pension - does this infringe the right to equality regardless of marital status? The Northern Ireland Court of Appeal said it did not in Brewster v N Ireland LGPS. The Supreme Court will be hearing the appeal on this point in December 2016.
Incorrect payment of pension increases
In Dutton v FDR Ltd pensions increases had been paid incorrectly for years. The judge had to choose between three different methods of interpreting the increases provisions pre- and post- a switch from a fixed to an LPI basis. The judge adopted what she thought was the most natural meaning of the provisions. The Court of Appeal will grapple with this in late February 2017.
An amendment without actuarial certificate – a cause for concern?
Certain amendments to schemes contracted-out from the second state pension are not allowed without actuarial certification (s37 of the PSA 1993). What is not settled is whether a formal certificate is needed or if a simple written actuarial advice meets this requirement. Steria Pension Plan Trustees v Sopra Steria Ltd will hopefully cast some light on this issue – due to be heard in December 2016 in the High Court.
Employers beware: you gotta have faith
Employers can ask for pension scheme benefits to change, or employers can use contractual agreements with employees for the same result. This is a delicate process and employers must be careful not to breach the duty of trust and confidence owed to employees.
Central to IBM v Dalgleish is the application and scope of this duty and Bradbury v BBC should provide further guidance – both going to the Court of Appeal in Spring 2017.
Biscuits wants VAT back from the taxman
The Trustees of the United Biscuits pension scheme are trying to recover 40 years' worth of VAT charges on fund management fees. This decision will have a wide reaching impact and could prompt many schemes to revisit historic VAT charges. As yet no date for this challenge has been set.
An old chestnut – can retrospective equalisation be achieved?
Could attempts to equalise retirement ages retrospectively be valid if they were made before such amendments were prohibited by statute? Or could the implied equal treatment rule found in s62 Pensions Act 1995 provide employers a fall back by automatically equalising retirement ages?
The Court of Appeal will be considering these questions in July 2017. The Court’s judgment in Safeway v Newton will provide interesting reading for schemes looking to save retrospective equalisation amendments.