The company had a final salary pension scheme. The respondents were variously trustees of the scheme, and representative employees. To calculate benefits, it was necessary to determine the ‘total remuneration from the Employers’. The employees asserted that this phrase included non-cash and fluctuating benefits. The company said that it related to core salary.
Held: The various definitions made a distinction between employment benefits which were taxable, and fluctuating benefits. It made no provision for calculating the value of non-cash benefits, and non-cash benefits were not included. The court outlined the difficulties in applying estoppel in such situations: ‘i) The pension scheme embodies not only the terms of a contract between individual members and the trustees but also a trust applicable to the fund comprising the contributions of members and surpluses derived from the past in which present and future members may be interested. Such trusts cannot be altered by estoppel because there can be no such estoppel binding future members.
ii) It is necessary to show that the principle is applicable to all existing members. It is not necessary for that purpose to call evidence relating to each and every member’s intention. But that will not absolve a claimant from adducing evidence to show that the principle must be applicable to the general body of members as such.
iii) What must be proved is that each and every member has by his ‘course of dealing put a particular interpretation on the terms of’ the Rules or ‘acted upon the agreed assumption that a given state of facts is to be accepted between them as true’. This involves more than merely passive acceptance. The administration of a pension scheme on a particular assumption as to the yardstick by which contributions or benefits are to be calculated may well give rise to a relevant assumption on the part of the trustees. It requires clear evidence of intention or positive conduct to bind the general body of members to such an assumption. Receipt of the benefit or payment of the contribution, without more, is unlikely to be enough.’
Judges:
Morritt LJ, Vice-Chancellor
Citations:
[2002] EWHC 983 (Ch), [2002] Pens LR 339
Links:
Statutes:
Income Tax (Employments) Regulations 1993 (1993 No 744)
Jurisdiction:
England and Wales
Cited by:
Cited – Trustee Solutions Ltd and others v Dubery and Another ChD 21-Jun-2006
The rules of a pensions scheme were altered. It was required that any such alteration be in writing, but the trustees had not signed the document creating the amendment.
Held: The words ‘writing under hand’ clearly required a signature, and . .
Lists of cited by and citing cases may be incomplete.
Financial Services, Employment, Income Tax
Updated: 04 June 2022; Ref: scu.167617