Newell Trustees Limited v Newell Rubbermaid UK Services Limited & Anor

An interim amending deed may operate as an executory trust where it clearly establishes the intended pension scheme structure pending a definitive deed. A conversion from final salary to money purchase benefits is not itself prohibited by a proviso protecting accrued benefits, but the final salary link must be preserved by properly valuing accrued benefits at the date of conversion.

For age discrimination under section 61(3) of the Equality Act 2010, the claimant must identify a scheme provision which requires a responsible person to contravene the non-discrimination rule. Rules recording a historical allocation of members between sections do not, without more, impose such an obligation on the current trustee.

The trustee of the Newell Rubbermaid UK Pension Scheme sought directions concerning changes made to the predecessor Parker Pension Plan in 1992 and 1993. Members aged under 40 were transferred automatically from the final salary section to a new money purchase section. Members aged 40 to 44 could choose between the sections, while members aged 45 and over remained in the final salary section.

The issues concerned the validity and effect of the deeds, member consent, alleged extrinsic contracts, the proviso protecting accrued benefits, the calculation of any underpin, and alleged age discrimination under the Equality Act 2010. The court also addressed forfeiture and interest issues.

1. Transfer and conversion. The 1992 Interim Amending Deed and its annexed booklets validly established the money purchase section and transferred the Under 40s and those 40-44s who elected to transfer. The deed operated as an executory trust pending the definitive 1993 Deed. Its general intention was sufficiently clear, and a close textual analysis appropriate to a definitive deed was unnecessary.
2. The 1993 Deed would alternatively have operated retrospectively from 1 January 1992. The written acceptance forms satisfied its administrative consent requirement. In addition, the 40-44s who elected to transfer entered into enforceable extrinsic contracts with the employer. The enhanced transfer sums supplied consideration.
3. Proviso. The proviso did not prohibit conversion of accrued final salary benefits into money purchase benefits. The Plan itself contemplated conversion of final salary benefits into a cash sum on transfer to another arrangement. However, the proviso prevented the final pensionable salary link from being broken.
4. The appropriate protection was a final salary underpin based on the transfer sum that should have been calculated at 1 January 1992 using the member’s actual subsequent salary increases and final pensionable salary. Any shortfall should be accumulated by reference to the money purchase section’s default investment strategy and added to the member’s pot, with interest to be determined consequentially. The approach did not amount to reinstatement in the final salary section.
5. Age discrimination. The claim under sections 61(1) and (3) of the Equality Act 2010 failed. The current Scheme rules did not require the trustee to discriminate. They recorded the historical allocation of members between sections, while members of any age could be in the money purchase section. The relevant age-based decision was made in 1991–1992, before age discrimination became unlawful, and was not remade by the trustee when administering the Scheme.
6. Alternatively, the alleged less favourable treatment would have been justified as a proportionate means of achieving legitimate aims of inter-generational fairness and cushioning the effect of the change for older employees. The temporal limitation in the Equality Act (Age Exceptions for Pension Schemes) Order 2010 would not have been disapplied under the European Union (Withdrawal) Act 2018.
7. The forfeiture provisions conferred a discretion on the trustee regarding arrears unclaimed for more than six years. Interest was left for consequential determination.

First-instance decision. No prior appellate decision is stated in the judgment.