Foster Wheeler Ltd v Hanley & Ors

Article 119 of the EEC Treaty had direct effect on occupational pension schemes from 17 May 1990. It automatically modified discriminatory scheme provisions so that members of the disadvantaged sex received the benefits of the advantaged sex during the Barber window. Later amendments could establish any non-discriminatory regime for future service, subject to accrued rights.

Where a scheme retained a single-pension structure and had validly closed the Barber window, the court should make only the minimum modifications needed to preserve equal treatment. It should not impose a split-pension regime unless that is necessary. A member with accrued rights based on a normal retirement date of 60 could therefore retire at 60 and take the whole pension, subject only to reductions validly applicable under the scheme rules.

Foster Wheeler Limited, principal employer of the Foster Wheeler Pension Plan, sought declarations concerning the effect of the decisions in Barber v Guardian Royal Exchange Assurance Group, Coloroll Pension Trustees Ltd v Russell and related authorities on the Scheme’s normal retirement dates and early-retirement provisions.

The Scheme had historically provided a normal retirement date of 65 for men and 60 for women. Following the Barber decision, male members acquired rights based on a normal retirement date of 60 for service during the Barber window. The Scheme rules were later amended to provide a common normal retirement date of 65, while retaining a single-pension structure and preserving accrued benefits.

The court determined whether members had mixed normal retirement dates, whether estoppel applied, how their benefits could be taken, whether reductions or split pensions were permitted, and whether overpayments could be recovered.

1. Questions 1 and 2. Members who joined between 1 April 1990 and 16 August 1993 and were in pensionable service on or after 17 May 1990 were mixed normal-retirement-date members. The Scheme was equalised only when the revised Definitive Deed and Rules were executed on 16 August 1993. The announcements and booklet did not create an estoppel. They amounted at most to passive receipt of information and expressly preserved the formal deed and rules.
2. Construction of rule 8(1). The words “among other things” did not preserve a general power to reduce benefits for retirement between ages 60 and 65. The rule permitted reductions for service before 1 April 2003 only by reference to the period up to age 60. The 2003 amendment permitted reductions in respect of later service up to the member’s normal retirement date. Question 8 was answered accordingly.
3. Question 3. Article 119 required male members to receive rights corresponding to the preserved age-60 rights of female members. In the context of the Scheme’s amended rules, those rights were implemented by implying the Company’s consent to early retirement at 60. The member was entitled to take the whole pension as a single pension, subject only to the permitted reduction for post-31 March 2003 service. A split-pension regime was not required by European law and would improperly rewrite the Scheme.
4. The reasoning in Cripps v Trustee Solutions concerned the direct legal modification of scheme rules during the Barber window and did not require a split pension after the window had been validly closed. The court followed Toray Textiles Europe Ltd in treating the issue as one of construction.
5. Questions 4, 7, 9, 10 and 11 were answered in accordance with those conclusions. Members could not draw only part of the single pension while continuing in service, rule 22(1) did not authorise a split pension, and no separate flexible-retirement amendment was required or permitted on the stated basis. A late-retirement factor applied where age-60 rights were not taken at that age.
6. Question 12 was answered “No”. Since members had received what the Scheme entitled them to receive, there was no relevant mistake or overpayment requiring recovery.

Not an appeal. The judgment determined a Part 8 claim in the High Court.