AON Trust Corporation Ltd v KPMG & Ors [2004] EWHC 1844 (Ch) (29 July 2004)

AON Trust Corporation Ltd v KPMG & Ors [2004] EWHC 1844 (Ch) (29 July 2004)

The Scheme is not a 'money purchase scheme' because the pension benefits are ultimately calculated by reference to average salary over the period of service, not solely by reference to contributions. The trustee has power under clause 8.5 to reduce pensions in payment, and such reduction constitutes a modification under s.67 Pensions Act 1995.

Citation
[2004] EWHC 1844 (Ch)
Parties
Claimant: AON Trust Corporation Limited; 1st Defendant: KPMG; 2nd Defendant: Ruth Muir James; 3rd Defendant: Julian Walker
Jurisdiction
England and Wales
Judgment Date
29 July 2004
Procedural Posture
Part 8 Application (chancery Division) / Judgment After Hearing on Preliminary Issues
Outcome
Declarations granted in favour of the Claimant on Questions 1, 2, and 3; representation orders made; costs to be paid by KPMG; Question 5 adjourned.
Legal Topics
Interpretation of Pension Scheme Rules, Power to Reduce Pensions in Payment, Application of Pensions Act 1995 S.67, Definition of 'money Purchase Scheme', Employer Liability for Pension Deficits
Pensions Law Trusts Law Employment Law Interpretation of Pension Scheme Rules Power to Reduce Pensions in Payment Application of Pensions Act 1995 S.67 Definition of 'money Purchase Scheme' Employer Liability for Pension Deficits

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 7 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

AON Trust Corporation Limited

Claimant

KPMG

1st Defendant

Ruth Muir James

2nd Defendant

Julian Walker

3rd Defendant

Procedural Posture

Part 8 Application (chancery Division) / Judgment After Hearing on Preliminary Issues

Legal Issues

  1. 1 Whether the trustee has power to reduce pensions in payment under clause 8.5 of the Scheme
  2. 2 Whether such power constitutes a modification under s.67 Pensions Act 1995
  3. 3 Whether the Scheme is a 'money purchase scheme' under the Pension Schemes Act 1993 and Pensions Act 1995

Ratio Decidendi

The Scheme is not a 'money purchase scheme' because the pension benefits are ultimately calculated by reference to average salary over the period of service, not solely by reference to contributions. The trustee has power under clause 8.5 to reduce pensions in payment, and such reduction constitutes a modification under s.67 Pensions Act 1995.

Court Disposition

Declarations granted in favour of the Claimant on Questions 1, 2, and 3; representation orders made; costs to be paid by KPMG; Question 5 adjourned.

Orders

  • Declaration that trustee may reduce pensions in payment under clause 8.5
  • Declaration that such reduction is a modification under s.67 Pensions Act 1995