Grievson v Grievson & Ors

A transfer value under a money purchase pension scheme must be calculated by reference to the benefits accrued under the scheme rules, followed by calculation of their cash equivalent in the prescribed manner. A notional allocation of scheme assets does not itself confer an entitlement to those assets. Estoppel may apply to a pension scheme, but its application is fact-sensitive and may affect some members differently from others. On an appeal limited to a point of law, the High Court cannot determine disputed facts. Where an estoppel issue has not been determined and its outcome is not inevitable, the proper course is to remit it to the Pensions Ombudsman.

The appellant, Allen Grievson, was a member of a money purchase pension scheme operated by Calberto Ltd. After leaving the company, he challenged the transfer value calculated for him, contending that it should reflect previous actuarial valuations and the share of fund notionally allocated to him.

The Pensions Ombudsman rejected the complaint on the basis that the valuation exceeded Allen’s strict entitlement under the scheme rules. The appeal to the High Court under Pension Schemes Act 1993, section 151(4), was limited to a point of law. The central issues were the correct basis for calculating the transfer value and whether Allen had raised an arguable case of estoppel which the Ombudsman had failed to determine.

1. The appeal was allowed and the estoppel issue was remitted to the Pensions Ombudsman for determination on the facts.

2. Under sections 94 and 97 of the Pension Schemes Act 1993, read with regulation 7(5) of the Occupational Pension Schemes (Transfer Values) Regulations 1996, calculation of a transfer value involves two stages. First, the benefits accrued under the applicable scheme rules must be identified. Secondly, the cash equivalent of those benefits must be calculated in the prescribed manner.

3. The scheme rules made the allocation of assets to a member’s account purely notional. They expressly provided that the assets remained part of the common fund and that the allocation gave no beneficial entitlement to particular assets. A share-of-fund calculation would therefore contradict the rules and ignore the applicable Inland Revenue limits.

4. The Ombudsman was entitled to conclude, as a question of fact, that the offer made to Allen exceeded his strict entitlement under the rules. The High Court could not reconsider that factual conclusion on an appeal confined to points of law.

5. The principles of estoppel by representation included a clear representation or promise, reasonable reliance, and detriment. Estoppel by convention required an expressly shared assumption, responsibility for that assumption, reliance in subsequent mutual dealing, and detriment or benefit making it unjust or unconscionable to assert the true position. These principles were taken from Steria Ltd v Hutchison and Catchpole v Trustees of the Alitalia Airlines Pension Scheme.

6. Although Allen’s informal complaint did not use the word estoppel, it sufficiently raised the issue. The Ombudsman had not addressed it. Because the material did not establish that the plea must either fail or succeed, the issue had to be remitted, without further factual comment that might influence the Ombudsman.

• Pensions Ombudsman: rejected the complaint concerning the transfer valuation, concluding that the offer was not prejudicial and likely exceeded the appellant’s strict entitlement under the scheme rules.
• High Court (Chancery Division): allowed the appeal to the extent that the estoppel issue had not been determined, and remitted that issue to the Pensions Ombudsman.