Harland and Wolff Pension Trustees Ltd v AON Consulting Financial Services Ltd

Where pension rules discriminate between men and women, Article 119 requires the disadvantaged class to receive the more favourable benefits for service completed after Barber and before valid equalising measures enter into force. A retrospectively expressed amendment does not avoid that requirement merely because domestic law permits retrospective amendment. Equality cannot be achieved by reducing the advantaged class’s benefits during that period. The right to equal treatment is not necessarily entrenched permanently: later, unrelated amendments may affect the resulting scheme benefits. However, linked transactions designed to level up and immediately level down benefits may be treated as a single impermissible reduction.

The claimant trustee brought a claim against its former pension advisers concerning advice given when the Harland and Wolff Pension Scheme was amended to equalise men’s and women’s normal retirement dates.

The original rules permitted retrospective amendment, subject to protecting pensions already in payment. In September 1993 the scheme amended women’s normal retirement date from 60 to 63 with effect from 17 May 1990, the date of the Barber judgment. Domestic law permitted the amendment.

The preliminary issue was whether Article 141, formerly Article 119, of the Treaty of Rome and the European authorities permitted that retrospective equalisation, or required men to receive benefits calculated by reference to age 60 for service during the period from 17 May 1990 to 7 September 1993.

1. Preliminary issue answered against the amendment. The requirement of equal pension benefits was not satisfied by the 1993 Deed and Rules insofar as men’s benefits for the period from 17 May 1990 to 7 September 1993 were calculated using a common normal retirement date of 63.
2. Article 119 required men, as the disadvantaged class during the Barber window, to receive the same advantages as women. The relevant comparison was with the benefits provided before valid equalising measures were adopted. Article 119 did not require a particular benefit level after equalisation, but it did require levelling up for the intervening period.
3. The court rejected the argument that an amendment expressed to take effect retrospectively from 17 May 1990 differed in substance from an amendment made prospectively from the date of execution. The substance was that, before the amendment, men had a right to equal treatment based on the more favourable female benefits. Smith v Avdel Systems Limited required that right to be respected.
4. The court observed that the resulting benefits were not necessarily protected permanently. A later amendment unrelated to equalisation could in principle affect them under the scheme’s amendment power. But a two-stage arrangement consisting of levelling up followed closely by levelling down would likely be treated as one transaction and would remain impermissible.
5. The court declined to make a further reference to the ECJ. The preliminary question was answered in the terms set out above.