It was possible to amend the provisions of a pension scheme provided the amendments did not conflict with the purposes of the scheme. How was a court to identify such purposes: ‘It is trite law that a power can be exercised only for the purpose for which it is conferred, and not for any extraneous or ulterior purpose. The rule-amending power is given for the purpose of promoting the purposes of the scheme, not altering them. Before I consider this question, I should make some general observations on the approach which I conceive ought to be adopted by the court to the construction of the trust deed and rules of a pension scheme. First, there are no special rules of construction applicable to a pension scheme; nevertheless, its provisions should wherever possible be construed to give reasonable and practical effect to the scheme, bearing in mind that it has to be operated against a constantly changing commercial background. It is important to avoid unduly fettering the power to amend the provisions of the scheme, thereby preventing the parties from making those changes which may be required by the exigencies of commercial life. This is particularly the case where the scheme is intended to be for the benefit not of the employees of a single company, but of a group of companies. The composition of the group may constantly change as companies are disposed of and new companies are acquired; and such changes need to be reflected by modifications to the scheme. Secondly, in the case of an institution of long duration and gradually changing membership like a club or pension scheme, each alteration in the rules must be tested by reference to the situation at the time of the proposed alteration, and not by reference to the original rules at its inception. By changes made gradually over a long period, alterations may be made which would not be acceptable if introduced all at once. Even the main purpose may be changed by degrees.’ and ‘So the main purpose of a club or pension scheme may be enlarged by appropriate amendments to the rules; and once it becomes too late to challenge the amendments, the enlarged purposes become the new basis by reference to which any further proposed changes must be considered.’
Millett J
[1987] 1 WLR 495, [1987] 1 All ER 538
England and Wales
Citing:
Cited – Re South African Supply and Cold Storage Co 1904
The court had to construe the words ‘reconstruction or amalgamation’ in the memorandum of association of a company: ‘The only question I have to decide is whether, in the case of each of these two companies, there has or has not been a winding-up . .
Cited – Brooklands Selangor Holdings Limited v Inland Revenue Commissioners ChD 1970
The court had to consider whether the arrangments before it amounted to a reconstruction for stamp duty purposes: ‘I will deal first with the question whether those transactions amounted to a reconstruction. In ordinary speech the word . .
Cited by:
Followed – Mettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
Cited – Bank of New Zealand v Board of Management of the Bank of New Zealand Officers’ Provident Association PC 14-Jul-2003
PC (New Zealand) The defendant operated a superannuation scheme for and on behalf of the officers of the bank it regulated. The trustees ought to amend the scheme, but it had been set up by statute.
Held: . .
Cited – Mytravel Group Plc, Re Companies Act 1985 ChD 24-Nov-2004
The company sought approval of a proposed reconstruction under the section.
Held: Approval could not be given. To count as a reconstruction two principal qualities were required. The business carried on should be the same or similar, and those . .
Cited – Barnardo’s v Buckinghamshire and Others SC 7-Nov-2018
The Court considered the interpretation of a clause in a pension scheme trust deed which defines the phrase ‘Retail Prices Index’ and which allows the trustees of the pension scheme to adopt a ‘replacement’ of the officially published Retail Prices . .
Lists of cited by and citing cases may be incomplete.
Updated: 10 October 2021; Ref: scu.195608 br>