WHEELS COMMON INVESTMENT FUND TRUSTEES LTD V HMRC

The Court of Justice of the European Union (“CJEU”) heard this case on 12 September 2012. The case concerns whether pension schemes should pay VAT on their investment management services.

The pensions press has reported that the EC intervened at the CJEU hearing to express its view that schemes should pay VAT. Whilst the EC’s view is not determinative, commentators believe that it makes it more likely that the CJEU will hold that VAT should be paid.

The CJEU’s ruling is expected sometime in the next six months.

Action

No action required.

IN THE MATTER OF SEA CONTAINERS SERVICES LTD (IN LIQUIDATION) [2012] EWHC 2547

The High Court has considered the construction of a stand-alone letter issued by the employer to certain female members of the Sea Containers 1983 Pension Scheme (the “Scheme”) as part of arrangements to equalise benefits following the Barber decision.

The letter provided that “should [the member] still elect to retire at her previous retirement age of 60, the Company shall provide a pension at age 60 equivalent to that which would have been available prior to the Pension Scheme changes which were introduced on 1 August 1994 [the equalisation changes]”.

The court held that:

  • a member could only benefit if she retired at age 60 from service with Sea Containers Services Limited (“SCSL”) or a group company and took an immediate pension;
  • the terms of the letter could only be enforced against SCSL; and
  • all benefits payable under the Scheme, including any accrued after age 60, should be taken into account in determining the amount payable under the terms of the letter. Benefits payable under any other pension arrangements should not be taken into account.

Action

No action required, but schemes wishing to enter into contractual agreements with members on their pension benefits should ensure that the terms of those agreements are clearly stated.

IBM UNITED KINGDOM PENSIONS TRUST LIMITED V IBM UNITED KINGDOM HOLDINGS LIMITED & OTHERS [2012] EWHC 2766

The High Court has granted rectification of the trust deed and rules of the IBM Pension Scheme to remove an employer consent requirement for retirement from active service between ages 60 and 63. However, the court refused to allow the trust deed and rules to be rectified to remove the employer consent requirement for retirement from deferral.

Whilst recent cases such as the Industrial Acoustics case have indicated that rectification proceedings can be completed more quickly and cheaply than in the past, this case demonstrates that where the facts took place many years ago and are in dispute, a lengthy hearing and significant levels of witness evidence will still be required.

A further case on whether IBM breached its duty of trust and confidence when making pension changes in 2009 is due to be heard in early 2013.

Action

No action required.

THE PROCTER & GAMBLE COMPANY V SVENSKA CELLULOSA AKTIEBOLAGET SCA [2012] EWHC 1257

Svenska Cellulosa Aktiebolaget (“SCA”) has been granted leave to appeal against the High Court’s decision in its dispute with Procter & Gamble.

The dispute involves the extent to which early retirement rights under the Procter & Gamble Pension Fund transferred to SCA following SCA’s purchase of a Procter & Gamble business and is the first case to consider the transfer of such rights in the context of a private sector pension scheme.

Action

No action required.