The Law Debenture Trust Plc v Lonrho Africa Trade & Finance Ltd & Anor [2002] EWHC 2732 (Ch) (17 December 2002)

The Law Debenture Trust Plc v Lonrho Africa Trade & Finance Ltd & Anor [2002] EWHC 2732 (Ch) (17 December 2002)

Rule 11.6 of the 1989 Rules confers on the trustee an unfettered power to augment any benefit payable or prospectively payable under the rules, without requiring the consent of the principal employer. This power extends to active members, covers both accrued and future service benefits, and can be exercised on an individual or class-wide basis. The trustee may impose terms as to additional contributions without requiring employer or member consent, provided the power is exercised on actuarial advice and in a fiduciary manner. Rule 11.6 is not limited to predator protection and is not constrained by the amendment power in section 16, except that it cannot be exercised inconsistently with...

Citation
[2002] EWHC 2732 (Ch)
Parties
Claimant: The Law Debenture Trust plc; First Defendant: Lonrho Africa Trade & Finance Limited; Second Defendant: David Simpson
Jurisdiction
England and Wales
Judgment Date
17 December 2002
Procedural Posture
Application for Construction of Pension Scheme Rules / High Court Judgment
Outcome
Declaration granted
Legal Topics
Construction of Pension Scheme Rules, Trustee Powers, Employer Consent, Augmentation of Benefits, Fiduciary Duties
Pensions Law Trusts Law Employment Law Construction of Pension Scheme Rules Trustee Powers Employer Consent Augmentation of Benefits Fiduciary Duties

Case Brief

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Parties

The Law Debenture Trust plc

Claimant

Lonrho Africa Trade & Finance Limited

First Defendant

David Simpson

Second Defendant

Procedural Posture

Application for Construction of Pension Scheme Rules / High Court Judgment

Legal Issues

  1. 1 Whether Rule 11.6 of the 1989 Rules requires employer consent for augmentation of benefits
  2. 2 Whether the trustee can impose additional contributions under Rule 11.6 without consent
  3. 3 Whether Rule 11.6 applies to active members and to both accrued and future benefits

Ratio Decidendi

Rule 11.6 of the 1989 Rules confers on the trustee an unfettered power to augment any benefit payable or prospectively payable under the rules, without requiring the consent of the principal employer. This power extends to active members, covers both accrued and future service benefits, and can be exercised on an individual or class-wide basis. The trustee may impose terms as to additional contributions without requiring employer or member consent, provided the power is exercised on actuarial advice and in a fiduciary manner. Rule 11.6 is not limited to predator protection and is not constrained by the amendment power in section 16, except that it cannot be exercised inconsistently with...

Court Disposition

Declaration granted

Orders

  • It is declared that Rule 11.6 empowers the trustee to augment benefits without employer consent, including for active members and both accrued and future benefits, and to impose additional contributions without consent, subject to actuarial advice and fiduciary duties.