IMG Pension Plan HR Trustees Ltd v German & Anor

IMG Pension Plan HR Trustees Ltd v German & Anor

The operative amendment power was clause 7(i) of the 1977 Deed, which contained a fetter prohibiting amendments reducing the value of benefits secured by contributions already made. The 1992 Deed was effective to convert accrued final salary rights to money purchase rights only subject to an underpin preserving the monetary value of those rights as at 3 March 1992. Retrospective conversion for the period 1 January to 3 March 1992 was ineffective. Member conduct, application forms, or explanatory documents did not amount to contract, estoppel, or waiver of accrued rights. The trustees’ decision to amend was not invalid, though they failed to exercise independent discretion. Compromise...

Parties
Claimant: HR Trustees Limited; First Defendant: Peter German; Second Defendant: International Management Group (UK) Ltd
Jurisdiction
England and Wales
Judgment Date
10 November 2009
Procedural Posture
Civil (pensions Trusts) / Judgment
Outcome
Declaratory judgment; partial invalidity of amendments; compromise agreements unenforceable under s.91(1) Pensions Act 1995.
Legal Topics
Amendment of Pension Schemes, Trustee Duties, Estoppel, Compromise Agreements, Retrospective Amendments
Trust Law Pensions Law Contract Law Amendment of Pension Schemes Trustee Duties Estoppel Compromise Agreements Retrospective Amendments

Case Brief

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Parties

HR Trustees Limited

Claimant

Peter German

First Defendant

International Management Group (UK) Ltd

Second Defendant

Procedural Posture

Civil (pensions Trusts) / Judgment

Legal Issues

  1. 1 What was the operative amendment power for the 1992 Deed?
  2. 2 Did the 1992 Deed validly convert accrued final salary rights to money purchase rights?
  3. 3 Can extrinsic documents or member conduct modify accrued rights?

Ratio Decidendi

The operative amendment power was clause 7(i) of the 1977 Deed, which contained a fetter prohibiting amendments reducing the value of benefits secured by contributions already made. The 1992 Deed was effective to convert accrued final salary rights to money purchase rights only subject to an underpin preserving the monetary value of those rights as at 3 March 1992. Retrospective conversion for the period 1 January to 3 March 1992 was ineffective. Member conduct, application forms, or explanatory documents did not amount to contract, estoppel, or waiver of accrued rights. The trustees’ decision to amend was not invalid, though they failed to exercise independent discretion. Compromise...

Court Disposition

Declaratory judgment; partial invalidity of amendments; compromise agreements unenforceable under s.91(1) Pensions Act 1995.

Orders

  • Declaration that clause 7(i) of the 1977 Deed was the operative amendment power and its fetter applies.
  • Declaration that the 1992 Deed is effective to convert accrued final salary rights to money purchase rights only with an underpin as at 3 March 1992.