Entrust Pension Ltd v Prospect Hospice Ltd & Anor [2012] EWHC 1666 (Ch) (18 June 2012)

Entrust Pension Ltd v Prospect Hospice Ltd & Anor [2012] EWHC 1666 (Ch) (18 June 2012)

Under the 1976 and 2005 Scheme rules, the trustee has discretion whether to allocate a share of actuarial surplus to members upon retirement; there is no fixed entitlement to surplus, and the trustee's decision is final and not open to challenge. The trustee must exercise its discretion in accordance with fiduciary duties, but is not obliged to adopt a particular method of computation unless specified. Deferred members' entitlement to surplus is similarly discretionary, and past administration does not create enforceable rights beyond the rules.

Citation
[2012] EWHC 1666 (Ch)
Parties
Claimant: Entrust Pension Limited; 1st Defendant: Prospect Hospice Limited; 2nd Defendant: Yvonne Hunter
Jurisdiction
England and Wales
Judgment Date
18 June 2012
Procedural Posture
Civil Pension Scheme Construction / Judgment on Split Trial Construction Issues
Outcome
Declaratory judgment on construction of Scheme rules; no fixed entitlement to surplus; trustee discretion affirmed.
Legal Topics
Interpretation of Pension Scheme Rules, Trustee Discretion, Actuarial Surplus, Deferred Member Benefits
Pensions Trusts Employment Interpretation of Pension Scheme Rules Trustee Discretion Actuarial Surplus Deferred Member Benefits

Case Brief

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Parties

Entrust Pension Limited

Claimant

Prospect Hospice Limited

1st Defendant

Yvonne Hunter

2nd Defendant

Procedural Posture

Civil Pension Scheme Construction / Judgment on Split Trial Construction Issues

Legal Issues

  1. 1 Whether members are entitled to a share of actuarial surplus under the Scheme rules
  2. 2 Extent of trustee discretion in awarding surplus
  3. 3 Methodology for calculating surplus and member shares

Ratio Decidendi

Under the 1976 and 2005 Scheme rules, the trustee has discretion whether to allocate a share of actuarial surplus to members upon retirement; there is no fixed entitlement to surplus, and the trustee's decision is final and not open to challenge. The trustee must exercise its discretion in accordance with fiduciary duties, but is not obliged to adopt a particular method of computation unless specified. Deferred members' entitlement to surplus is similarly discretionary, and past administration does not create enforceable rights beyond the rules.

Court Disposition

Declaratory judgment on construction of Scheme rules; no fixed entitlement to surplus; trustee discretion affirmed.

Orders

  • Split trial ordered; factual issues to be determined at subsequent hearing in October 2012.
  • Entrust to administer Scheme in accordance with judgment; representation orders for defendants.