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Patrick Kennedy Partner, Gateley Plc Director, Entrust Pension Limited
Key Cases
Danks v QinetiQ (2012) Arcadia (2014) Buckingham- shire v Barnardo’s (2015 – 2018) Thales (2017) British Airways (2017) BT (2018) 2
ACA Northern Conference 21 September 2018 RPI/CPI pensions cases: - - PowerPoint PPT Presentation
ACA Northern Conference 21 September 2018 RPI/CPI pensions cases: - - PowerPoint PPT Presentation
ACA Northern Conference 21 September 2018 RPI/CPI pensions cases: legal update on latest case law Patrick Kennedy Partner, Gateley Plc Director, Entrust Pension Limited Danks v QinetiQ (2012) Arcadia BT (2018) (2014) Key Cases
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Danks v QinetiQ Holdings Ltd (2012)
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High Court Court of Appeal Supreme Court
- Index RPI “or any other
suitable cost-of-living index selected by the Trustees”
- Section 67 PA 1995
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Key Cases
Danks v QinetiQ (2012) Arcadia (2014) Buckingham- shire v Barnardo’s (2015 – 2018) Thales (2017) British Airways (2017) BT (2018) 4
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Arcadia Group Ltd v Arcadia Group Pension Trust Ltd and another (2014)
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High Court Court of Appeal Supreme Court
- RPI “or any similar index
satisfactory for the purposes of HMRC”
- Power to select CPI?
- Who can exercise the
power?
- CPI similar and/or
satisfactory?
- Section 67 PA 1995
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Key Cases
Danks v QinetiQ (2012) Arcadia (2014) Buckingham- shire v Barnardo’s (2015 – 2018) Thales (2017) British Airways (2017) BT (2018) 6
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Buckinghamshire and others v Barnardo’s and others (2015 – 2018)
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High Court Court of Appeal Supreme Court
- RPI “or any replacement adopted
by the Trustees without prejudicing Approval”
- Danks and Arcadia – no assistance
at all.
- Rainy Sky “unitary exercise”
- One stage X Two stage √
- Replacement ≈ ceased to be
published.
- No “replacement” while RPI
remains an officially published index
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Key Cases
Danks v QinetiQ (2012) Arcadia (2014) Buckingham- shire v Barnardo’s (2015 – 2018) Thales (2017) British Airways (2017) BT (2018) 8
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Thales UK Ltd v Thales Pension Trustees Ltd and others (2017)
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High Court Court of Appeal Supreme Court
- If RPI “is not published or its
compilation is materially changed, the Principal Employer, with the agreement of the Trustees, will determine the nearest alternative index to be applied”
- “If RPI is revised to a new base or if
that index is otherwise altered…subsequent variations will be on a basis determined by the Trustees having regard to the alteration made to RPI”
- UKHPI – material change. Nearest
alternative index - RPI
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Key Cases
Danks v QinetiQ (2012) Arcadia (2014) Buckingham- shire v Barnardo’s (2015 – 2018) Thales (2017) British Airways (2017) BT (2018) 10
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British Airways plc v Airways Pension Scheme Trustees Ltd (2017)
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High Court Court of Appeal Supreme Court
- Trust Deed “may be amended or added
to in any way by means of a supplemental deed executed by … the Management Trustees” (Clause 18)
- 2011, Annual Review Order, RPI to CPI
- Clause 18 exercised to amend Rule 15
(pension increases) by adding “the Management Trustees may at their discretion, and shall in any event at least
- nce in any one year period, review the
annual rate of pension payable … and shall have power, following such a review, by revaluation to apply discretionary increases in addition to those set out in this Rule …”
- Ultra vires - managers / administrators
not paymasters / design.
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Key Cases
Danks v QinetiQ (2012) Arcadia (2014) Buckingham- shire v Barnardo’s (2015 – 2018) Thales (2017) British Airways (2017) BT (2018) 12
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BT plc v BT Pension Scheme Trustees Ltd (2018)
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High Court Court of Appeal Supreme Court
- “If [RPI] ceases to be published, or is
so amended as to invalidate it in the view of the Principal Company as a continuous basis for purposes of calculating increases, the Principal Company shall substitute such other index or appropriate basis of comparison as it shall in consultation with the Trustees decide”
- Lapse (Entrust case)
- RPI, 1956, Carli, arithmetic, formula
effect, clothing / CPI, 1996, Jevons, geometric
- Objective test / risk of failing to keep
pace with real increases in outgoings
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Key Cases
Danks v QinetiQ (2012) Arcadia (2014) Buckingham- shire v Barnardo’s (2015 – 2018) Thales (2017) British Airways (2017) BT (2018) 14
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Key Concepts
Pensions Ombudsman White Paper Hard Wired Trust Powers Pension Increase Exchange The Future 15
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Key Concepts
USDAW (2018) “RPI
- r other
index considered suitable by the Trustees” £90bn £200bn Construction
- unitary
exercise (Rainy Sky) Proper exercise / ultra vires Member Option / Liability Management Deficit / Surplus 16
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Questions
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t: +44 (0) 161 836 7788 e: Patrick.Kennedy@Gateleyplc.com
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Contact Details
Patrick Kennedy
Partner