Houldsworth 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 calculate benefits took the schemes outside the definition of ‘money purchase benefits’ in section 181(1) of the 1993 Act.
Held: The appeal was dismissed (Lord Manse dissenting). The maintenance of an equilibrium of assets and liabilities is not a requirement of the statutory definition of both money purchase schemes, and for money purchase benefits. The deputy judge and the Court of Appeal correctly concluded that the GIF mechanism did not unhitch a member’s eventual benefits from that member’s total contributions. They provided for a yield of guaranteed interest at a modest rate fixed by an objective test, together with the prospect of further bonuses at a modest rate, fixed, again, by an objective test under which the trustees had no discretion.

Lord Walker, Lady Hale, Lord Mance, Lord Collins, Lord Clarke
UKSC 2010/0074, [2011] UKSC 42, [2011] 1 WLR 1912, [2011] Pens LR 313, [2011] ICR 1069
Bailii Summary, SC Summary, SC, Bailii
Pension Schemes Act 1993 181(1), Council Directive 80/987/EEC of 20 October 1980, Directive 2003/41/EC of the European Parliament and the Council of 3 June 2003 relating to the Activities and Supervision of Institutions for Occupational Retirement Provision
England and Wales
Appeal fromHouldsworth and Another v Bridge Trustees Ltd and Another CA 4-Mar-2010
. .
CitedAon 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 . .
CitedFarrell v Alexander HL 24-Jun-1976
The House considered the construction of a consolidation Act.
Held: It is ordinarily both unnecessary and undesirable to construe a consolidation Act by reference to statutory antecedents, but it is permissible to do so in a case where the . .
CitedMarleasing SA v La Comercial Internacional de Alimentacion SA ECJ 13-Nov-1990
Sympathetic construction of national legislation
LMA OVIEDO sought a declaration that the contracts setting up Commercial International were void (a nullity) since they had been drawn up in order to defraud creditors. Commercial International relied on an EC . .
At First InstanceBridge Trustees Ltd v Yates and others ChD 1-May-2008
. .
CitedAON 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 . .
CitedSt Aubyn v Attorney General HL 12-Jul-1951
The donor exercised powers of appointment ‘to make some part of the settled property his own’, and it was ‘wholly irrelevant that by a contemporaneous or later transaction he surrenders his life interest in other parts of it’. The different parts of . .

Lists of cited by and citing cases may be incomplete.

Financial Services, European

Updated: 02 November 2021; Ref: scu.442224