BT Pension Scheme Trustees Ltd v British Telecommunications Plc & Anor

BT Pension Scheme Trustees Ltd v British Telecommunications Plc & Anor

The buy-out obligation was imposed by the 1983 deed and maintained in subsequent rules; the liability to contribute under the pension trust deed is a single, indivisible obligation that vested under section 60 and is covered by the Crown guarantee in section 68, including liabilities for post-transfer joiners. However, liabilities arising from amendments to the scheme after the transfer date, such as those relating to employees of participating employers other than BT, are not covered by the Crown guarantee.

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
Civil (pensions/statutory Interpretation) / Trial Judgment
Outcome
Declaratory judgment (issues determined)
Legal Topics
Statutory Guarantee for Pension Liabilities, Employer Obligations Under Pension Trust Deed, Scope of Government Guarantee, Interpretation of Vesting Provisions, Effect of Scheme Amendments on Guarantee Liability
Pensions Law Statutory Interpretation Public Law Statutory Guarantee for Pension Liabilities Employer Obligations Under Pension Trust Deed Scope of Government Guarantee Interpretation of Vesting Provisions Effect of Scheme Amendments on Guarantee Liability

Case Brief

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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

Civil (pensions/statutory Interpretation) / Trial Judgment

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 rules maintained the buy-out obligation
  3. 3 Whether the Crown guarantee covers liabilities for post-transfer joiners or is limited to pre-transfer joiners

Ratio Decidendi

The buy-out obligation was imposed by the 1983 deed and maintained in subsequent rules; the liability to contribute under the pension trust deed is a single, indivisible obligation that vested under section 60 and is covered by the Crown guarantee in section 68, including liabilities for post-transfer joiners. However, liabilities arising from amendments to the scheme after the transfer date, such as those relating to employees of participating employers other than BT, are not covered by the Crown guarantee.

Court Disposition

Declaratory judgment (issues determined)

Orders

  • The 1983 deed imposed a buy-out obligation on the employer upon scheme termination.
  • The 2002 and subsequent rules maintained the buy-out obligation.