Aon Trust Corporation Ltd v KPMG (A Firm) and others: CA 28 Jul 2005

The claimants were trustees of the defendant’s pension scheme. They sought additional payments to make up a shortfall in funds, on the basis that the fund was an earnings related pension scheme, and that the company therefore had obligations to make good any shortfall in the scheme.
Held: Compulsory contributions were payable in each year which were calculated from the employees earnings. Payments could be reduced only if the scheme was in surplus. It would be a money purchase scheme if all the benefits were money purchase benefits calculated from contributions not counting as average salary benefits. In this scheme the benefits were calculated according to average earnings, and the employer’s appeal failed. The statutory words ‘calculated by reference to’ mean ‘calculated only by reference to, in the sense that the benefit in question must be the direct product of the contributions.’

Mummery, Chadwick, Jonathan Parker LJJ
[2005] EWCA Civ 1004, Times 09-Sep-2005, [2006] ICR 18, [2006] 1 WLR 97
Pensions Schemes Act 1993 181(3), Pensions Act 1995 124(5) 56 75(1)
England and Wales
Appeal fromAON Trust Corporation Ltd v KPMG and others ChD 29-Jul-2004
The defendant’s pension scheme had been set up by deed in 1949. The trustees argued that the firm had an obligation to make substantial additional contributions to ensure it was not underfunded. The defendants argued that it was a money purchase . .
CitedBarclays Bank plc v Holmes 2000
A pension in payment is an entitlement under a pension scheme. . .
CitedNational Grid Co Plc v Mayes and Others; International Power Plc (Formerly National Power Plc) v Healy and Others HL 7-Jun-2001
The release by the trustees of a sum due to the pension scheme from the employers, did not make funds payable to the employer, so as to trigger the clause within the scheme trust deed which would restrain such a payment. Where an actuarial surplus . .

Cited by:
CitedHouldsworth and Another v Bridge Trustees Ltd and Another SC 27-Jul-2011
The court was asked as to the dividing line, for regulatory purposes, between defined benefit (normally earnings-related) schemes and defined contribution (or money purchase) schemes. The Secretary of State asserted that some methods used to . .

Lists of cited by and citing cases may be incomplete.

Financial Services

Updated: 10 January 2022; Ref: scu.229046