Hogan Lovells

Key Dates

British Telecommunications PLC v BT Pension Scheme Trustees Limited and another.

Judgment given on 19 January 2018.


Summary

Summary

The High Court (Zacaroli J) has decided that the retail prices index (RPI) had not become "inappropriate" for the purposes of the scheme rule determining pension increases.

The 2016 Rule

The relevant rule (the "2016 Rule") provided for pensions in payment of members in Section C of the Scheme to be increased annually in accordance with the "cost of living" (to a maximum of 5%). The cost of living was to be measured by RPI …

"or if this ceases to be published or becomes inappropriate, such other measure as the Principal Company, in consultation with the Trustees, decides."

The 1993 Rule

The case also concerned the meaning of a further rule (the "1993 Rule") which provided for pensions in excess of the guaranteed minimum pension (GMP) to be increased by the lower of 5% and the annual increase in the "General Index". The General Index was defined as RPI. The 1993 Rule also provided that …

"If the General Index 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."

The High Court was asked to rule on various issues relating to the 2016 Rule and the 1993 Rule.

Conclusions

In relation to the 1993 Rule, the High Court held that:

Had RPI become inappropriate?

In concluding that RPI had not become inappropriate for the purposes of the 2016 Rule, the judge's reasoning included the following.



Date Accessed: 28/05/2022