Safeway Ltd v Newton & Anor

A pension scheme amendment power requiring a deed is not exercised merely by announcing a proposed alteration. An announcement may identify the date from which a later deed is to operate retrospectively, but it does not itself alter members’ rights.

Under article 119 of the EEC Treaty, benefits accruing during the Barber window had to be levelled up to the more favourable benefits until valid equalisation measures took effect. A retrospective amendment could not achieve equalisation by levelling down the advantaged class, even where domestic law permitted retrospective amendment or where the process was presented as two stages.

Safeway sought a declaration concerning the normal pension age under the Safeway Pension Scheme. The scheme provided a normal pension age of 60 for women and 65 for men. Notices issued in 1991 announced a common age of 65 from 1 December 1991, but the formal amending deed was not executed until 2 May 1996.

The issues were whether the notices themselves amended the scheme under clause 19 of the 1984 deed, whether the 1996 deed could lawfully operate retrospectively under article 119 of the EEC Treaty, and whether sections 62 to 65 of the Pensions Act 1995 altered the result.

1. Clause 19. Clause 19 required an alteration to the scheme to be effected by supplemental deed. The reference to a prior written announcement permitted a later deed to operate from the announcement date, but did not authorise the trustees to administer the scheme as though the deed had already been executed. The 1991 notices therefore did not themselves change women’s normal pension age.
2. EU equal-treatment principle. The ECJ decisions in Coloroll Pension Trustees Ltd v Russell and Smith v Avdel Systems Ltd established that, during the period between the Barber judgment and valid equalisation measures, the disadvantaged class had to receive the benefits of the advantaged class. The relevant measures had to take effect before equal treatment could be achieved.
3. A domestic power permitting retrospective amendment could not be used to reduce women’s benefits during the Barber window. The same result could not be achieved through an artificial two-stage process consisting of levelling up followed shortly afterwards by levelling down. The court followed its decision in Harland & Wolff Pension Trustees Ltd v Aon Consulting Financial Services Ltd.
4. Section 62 of the Pensions Act 1995 did not fully implement article 119 so as to permit the 1996 deed to be treated as an independent later reduction. The 1996 deed formed part of arrangements designed to achieve equalisation and therefore remained subject to the prohibition on retrospective levelling down.
5. Safeway’s claim for a declaration that normal pension age had been equalised at 65 from 1 December 1991 was rejected. For service during the relevant period, both men and women were entitled to benefits calculated by reference to a normal pension age of 60.

First-instance decision. No earlier decision in the same proceedings was stated.