Britvic Plc v Britvic Pensions Ltd & Anor

Britvic Plc v Britvic Pensions Ltd & Anor

The alteration power in rule C10(2) of the Britvic Pension Plan allows the principal employer to substitute only a higher rate of increase, not a lower rate, for defined benefit pensions in payment and deferred benefits. The phrase 'any other rate' is interpreted purposively, in light of the scheme's context, legislative background, and admissible documents, to mean 'any other higher rate.' The trustee must apply the default capped RPI rate unless the employer directs a higher rate. The same construction applies to rule C2(2) for revaluation of deferred pensions, and the employer may not set different rates for revaluation and pension increases except for pre- and post-2008 accrual caps.

Parties
Claimant: Britvic Plc; First Defendant: Britvic Pensions Limited; Second Defendant: Simon Richard Mohun
Jurisdiction
England and Wales
Judgment Date
17 January 2020
Procedural Posture
Part 8 Claim / Substantive Hearing, Judgment
Outcome
Declaratory judgment in favour of representative beneficiary's construction; employer's wider interpretation rejected.
Legal Topics
Construction of Pension Scheme Rules, Interpretation of Alteration Power, Statutory Minimum Increases, Revaluation of Deferred Benefits
Pensions Trusts Contract Construction of Pension Scheme Rules Interpretation of Alteration Power Statutory Minimum Increases Revaluation of Deferred Benefits

Case Brief

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Parties

Britvic Plc

Claimant

Britvic Pensions Limited

First Defendant

Simon Richard Mohun

Second Defendant

Procedural Posture

Part 8 Claim / Substantive Hearing, Judgment

Legal Issues

  1. 1 Whether the alteration power in rule C10(2) allows the principal employer to substitute any rate (higher or lower) or only a higher rate
  2. 2 Whether the principal employer may set different rates for revaluation of deferred pensions under rule C2(2) than for increases to pensions in payment under rule C10(2)

Ratio Decidendi

The alteration power in rule C10(2) of the Britvic Pension Plan allows the principal employer to substitute only a higher rate of increase, not a lower rate, for defined benefit pensions in payment and deferred benefits. The phrase 'any other rate' is interpreted purposively, in light of the scheme's context, legislative background, and admissible documents, to mean 'any other higher rate.' The trustee must apply the default capped RPI rate unless the employer directs a higher rate. The same construction applies to rule C2(2) for revaluation of deferred pensions, and the employer may not set different rates for revaluation and pension increases except for pre- and post-2008 accrual caps.

Court Disposition

Declaratory judgment in favour of representative beneficiary's construction; employer's wider interpretation rejected.

Orders

  • Declaration that on any 1 October, the trustee must increase pensions to which rules C10(2) and C2(2) apply by the default rate in the absence of any direction by the employer to increase at a higher rate.
  • Declaration that the employer may only direct a higher rate, not a lower rate, under rule C10(2).