FDR Ltd v Dutton and others

Pension – Pension scheme. The Court of Appeal, Civil Division, allowed the employer's appeal concerning the interaction of old and new rules in respect of the FDR pension scheme. Under the old rules, pensioners had been entitled to annual increases in their pensions of 3% compound. Since 1991, when new rules were introduced, the rate of increase was changed. Three approaches were at play and the lower court had ruled that one of the approaches proposed by the trustees, the most expensive to the scheme, was the correct one. The Court of Appeal disagreed and held that the terms of a proviso to the power of amendment in the old rules, were such that any change in the rules had to not prejudicially affect any pension in payment or any accrued pension rights. It held, among other things that the modified cumulative approach, preferred by the employer, preserved that right and enabled a pensioner to take the benefits of the new rules if, in any given year, produced a better outcome for her.

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