Hogan Lovells

Key Dates

Judgment issued 5 October 2017


Summary

The Court of Appeal decided to refer to the European Court of Justice the question of whether there is a principle of EU law that prohibits retrospective levelling down in an exercise to equalise normal pension ages.

Background

Clause 19, the scheme amendment power, said that amendments had to be by deed and that retrospective amendments were permitted, to take effect from date of any prior written announcement or a date occurring at any reasonable time previous to the date of the amending deed.

An announcement and a letter in 1991 both announced the introduction of an equal normal pension age (NPA) of 65 for men and women with effect from 1 December 1991. Formal recognition in the scheme documentation of the common NPA was in a deed dated 2 May 1996.

The High Court rejected the employer's claim for a declaration confirming that normal pension age was equalised at age 65 with effect from 1 December 1991, the date it was announced to members. The 1991 notices did not amount to amendment within clause 19. Exercise of the amendment power required a deed, so an effective alteration was only made by the 1996 Deed.

Under the principle of EU law against retrospective levelling down to comply with the Barber decision, the NPA for men and women in relation to service between 1 December 1991 and 2 May 1996 was age 60.

Judgment

The Court of Appeal upheld the High Court's decision that the power of amendment could only be exercised by deed, and not by written announcement. The language of clause 19 was plain and defined the single mode of amendment by deed.

The Court of Appeal disagreed with the High Court that the question of EU law is clear. The question of whether Smith v Avdel established a principle that retrospective levelling down could not take place during the period when the Barber window remained open (from the date of the Barber decision – 17 May 1990 – to the date when effective measures were taken to level down), where there was a clear power for the employer and/or trustee under domestic law to level them down with effect on past pensionable service,  was referred to the European Court of Justice. 



Date Accessed: 03/12/2021