Entrust Pension Ltd v Prospect Hospice Ltd & Anor

Entrust Pension Ltd v Prospect Hospice Ltd & Anor

The trustee's power to allocate actuarial surplus under the scheme rules is discretionary, not mandatory; the trustee is not obliged to allocate surplus to retiring or deferred members unless it chooses to do so, and the discretion ceases to be exercisable when no actuarial surplus remains. Deferred members' entitlement to consideration for surplus arises at the date of leaving service, but if the trustee fails to exercise its discretion and surplus later lapses, the duty cannot be performed.

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 / Judgment
Outcome
Judgment for the employers; trustee's discretion affirmed; no fixed entitlement to surplus for members.
Legal Topics
Interpretation of Pension Scheme Rules, Discretionary Powers of Trustees, Actuarial Surplus Allocation, Deferred Pension Rights
Trusts Pensions Employment Interpretation of Pension Scheme Rules Discretionary Powers of Trustees Actuarial Surplus Allocation Deferred Pension Rights

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Parties

Entrust Pension Limited

Claimant

Prospect Hospice Limited

1st Defendant

Yvonne Hunter

2nd Defendant

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether trustees have discretion or duty to allocate actuarial surplus to retiring members under scheme rules
  2. 2 Timing and method of calculation for deferred pension benefits
  3. 3 Effect of trustee's failure to exercise discretion over surplus

Ratio Decidendi

The trustee's power to allocate actuarial surplus under the scheme rules is discretionary, not mandatory; the trustee is not obliged to allocate surplus to retiring or deferred members unless it chooses to do so, and the discretion ceases to be exercisable when no actuarial surplus remains. Deferred members' entitlement to consideration for surplus arises at the date of leaving service, but if the trustee fails to exercise its discretion and surplus later lapses, the duty cannot be performed.

Court Disposition

Judgment for the employers; trustee's discretion affirmed; no fixed entitlement to surplus for members.

Orders

  • Issues 1-5 and 6-10 answered in favour of employers: trustee has discretion over surplus allocation.
  • Issue 12 answered in favour of members: deferred pension entitlement arises at leaving service, but surplus allocation subject to trustee discretion.