Capital Cranfield Trustees Ltd v Beck & Anor

A power in pension-scheme rules to determine a normal retiring date in “any particular case” is confined to individual cases or particular members. It does not authorise alteration of the scheme rules for a class or all members. Such an alteration must comply with the scheme’s express amendment power and safeguards.

An announcement purporting to equalise retirement ages was ineffective where it was unsigned, did not satisfy the formal requirements for amendment, and was made by the trustee rather than by the employers exercising the separate determination power. The court also indicated, without deciding, that the power was likely intended principally for exercise when membership commenced.

The claimant, the professional trustee of the A. C. Skelton Pension & Life Assurance Scheme, sought declarations concerning an October 1994 announcement. The announcement stated that normal retirement age would be equalised at 65, while preserving specified rights to retire at 60.

The issue was whether rule 3’s definition of normal retiring date conferred a free-standing power to increase the normal retiring date for future accrual by existing members and, if so, whether the announcement validly exercised that power. The parties accepted that the announcement did not satisfy rule 41, the scheme’s formal amendment provision.

1. The announcement was ineffective. It did not equalise the normal retiring dates for the purposes of the Scheme.
2. Rule 3 permitted the Employers to determine a day as the normal retiring date “in any particular case” and to notify it in writing to the member concerned. The language distinguished an individual case, or particular cases, from an alteration applicable to a class or to all members.
3. The announcement sought to change the rules governing normal retirement age for the membership generally. In substance, it was therefore an alteration of the Rules. That alteration fell within rule 41 and could not be achieved through the narrower power in the definition of normal retiring date.
4. The parties accepted, consistently with Trustee Solutions Ltd v Dubery [2007] ICR 412, that “under hand” required signature as a substantive formality. The unsigned announcement could not operate under rule 41.
5. Even assuming that rule 3 conferred a power to equalise normal retiring dates generally, the announcement was not a determination by “the Employers”. There were two employers, but the announcement was made by Skelton alone and expressly in its capacity as sole trustee. The Rules distinguished the capacities and functions of the Employers and the Trustees.
6. The beneficial principle discussed in Davis v Richards & Wallington Industries Ltd [1990] 1 WLR 1511 and Stannard v Fisons Pension Trust Ltd [1991] PLR 225 did not cure the defect. The announcement showed that Skelton acted as trustee, not as an Employer, and did not resolve the further difficulty that only one of two Employers had acted.
7. The judge considered, but did not decide, whether rule 3’s power was intended to be exercisable only at the commencement of membership. That limitation was described as strong and persuasive.