BT Pension Scheme Trustees Ltd v British Telecommunications Plc & Anor [2010] EWHC 2642 (Ch) (21 October 2010)

BT Pension Scheme Trustees Ltd v British Telecommunications Plc & Anor [2010] EWHC 2642 (Ch) (21 October 2010)

The 1983 deed imposed a buy-out obligation on the employer upon scheme termination, requiring funding sufficient to purchase annuities for all members. This obligation continued under the 2002 and subsequent deeds. However, the Crown guarantee under section 68 of the Telecommunications Act 1984 is limited to liabilities vested in BT at the transfer date and does not extend to liabilities for post-transfer joiners.

Citation
[2010] EWHC 2642 (Ch)
Parties
Claimant: BT Pension Scheme Trustees Limited; First Defendant: British Telecommunications plc; Second Defendant: Secretary of State for Business, Innovation and Skills
Jurisdiction
England and Wales
Judgment Date
21 October 2010
Procedural Posture
Chancery Division Trial / Judgment After Trial of Preliminary Issues
Outcome
Partially in favour of the Claimant (Trustee) as to the existence and continuity of the buy-out obligation; in favour of the Secretary of State as to the limitation of the Crown guarantee to pre-transfer joiners.
Legal Topics
Statutory Guarantee, Pension Scheme Liabilities, Employer Obligations, Crown Guarantee, Scheme Termination, Buy Out Obligation, Post Transfer Joiners, Interpretation of 'liabilities'
Pensions Trusts Company Law Public Law Statutory Guarantee Pension Scheme Liabilities Employer Obligations Crown Guarantee +4 more

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Parties

BT Pension Scheme Trustees Limited

Claimant

British Telecommunications plc

First Defendant

Secretary of State for Business, Innovation and Skills

Second Defendant

Procedural Posture

Chancery Division Trial / Judgment After Trial of Preliminary Issues

Legal Issues

  1. 1 Whether the 1983 deed imposed a buy-out obligation on the employer upon scheme termination
  2. 2 Whether the 2002 and subsequent deeds continued such an obligation
  3. 3 Whether the Crown guarantee covers liabilities for post-transfer joiners or is limited to pre-transfer joiners

Ratio Decidendi

The 1983 deed imposed a buy-out obligation on the employer upon scheme termination, requiring funding sufficient to purchase annuities for all members. This obligation continued under the 2002 and subsequent deeds. However, the Crown guarantee under section 68 of the Telecommunications Act 1984 is limited to liabilities vested in BT at the transfer date and does not extend to liabilities for post-transfer joiners.

Court Disposition

Partially in favour of the Claimant (Trustee) as to the existence and continuity of the buy-out obligation; in favour of the Secretary of State as to the limitation of the Crown guarantee to pre-transfer joiners.

Orders

  • Declaration that the employer is obliged to fund the scheme on termination to the level required to purchase annuities for all members under the deed and rules.
  • Declaration that the Crown guarantee does not extend to liabilities for post-transfer joiners.