Aon Trust Corporation Ltd v KPMG (A Firm) & Ors

Aon Trust Corporation Ltd v KPMG (A Firm) & Ors

The scheme is not a money purchase scheme because the calculation of benefits incorporates actuarial factors and is based on average salary, not solely on contributions. The trustee's power under clause 8.5 to reduce benefits is a modification under section 67 and is subject to statutory restrictions. Clause 8.5 does not empower the trustee to reduce pensions already in payment.

Parties
Claimant: Aon Trust Corporation Ltd; Defendant: KPMG (a firm); Defendant: Ms Ruth James; Defendant: Mr Julian Walker
Jurisdiction
England and Wales
Judgment Date
28 July 2005
Procedural Posture
Civil Appeal / Judgment on Appeal From High Court Chancery Division
Outcome
Appeal allowed in part; Vice-Chancellor's decisions on questions 2 and 3 upheld, decision on question 1(i) reversed.
Legal Topics
Money Purchase Schemes, Minimum Funding Requirement, Modification of Pension Schemes, Average Salary Benefits, Statutory Interpretation
Pensions Trusts Employment Money Purchase Schemes Minimum Funding Requirement Modification of Pension Schemes Average Salary Benefits Statutory Interpretation

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 6 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Aon Trust Corporation Ltd

Claimant

KPMG (a firm)

Defendant

Ms Ruth James

Defendant

Mr Julian Walker

Defendant

Procedural Posture

Civil Appeal / Judgment on Appeal From High Court Chancery Division

Legal Issues

  1. 1 Whether the trustee has power under clause 8.5 to reduce pensions already in payment
  2. 2 Whether the exercise of the power in clause 8.5 is subject to section 67 of the Pensions Act 1995
  3. 3 Whether the scheme is a 'money purchase scheme' under Pension Schemes Act 1993 and Pensions Act 1995

Ratio Decidendi

The scheme is not a money purchase scheme because the calculation of benefits incorporates actuarial factors and is based on average salary, not solely on contributions. The trustee's power under clause 8.5 to reduce benefits is a modification under section 67 and is subject to statutory restrictions. Clause 8.5 does not empower the trustee to reduce pensions already in payment.

Court Disposition

Appeal allowed in part; Vice-Chancellor's decisions on questions 2 and 3 upheld, decision on question 1(i) reversed.

Orders

  • Trustee does not have power under clause 8.5 to reduce pensions already in payment.
  • Exercise of clause 8.5 power is subject to section 67 of the Pensions Act 1995.