Sarjeant & Ors v Rigid Group Ltd [2012] EWHC 3757 (Ch) (20 December 2012)

Sarjeant & Ors v Rigid Group Ltd [2012] EWHC 3757 (Ch) (20 December 2012)

The scheme rules, properly construed, permit the trustees to implement a staged or partial buyout (Headway arrangement) during winding up, as there is no requirement that the winding up be achieved in a single step, and the rules allow for the purchase of multiple policies over time. However, in relation to GMP rights, the overriding appendix requires that any transfer or buyout of GMPs must secure the whole accrued entitlement, so a partial buyout of GMPs is not permitted without member consent.

Citation
[2012] EWHC 3757 (Ch)
Parties
Claimant: Roger Ivor Sarjeant; Claimant: Philip Howard Burditt; Claimant: Frank Holden; Defendant: Rigid Group Limited
Jurisdiction
England and Wales
Judgment Date
20 December 2012
Procedural Posture
Chancery Division Pension Scheme Construction / Judgment After Hearing on Construction of Pension Scheme Rules
Outcome
Declaration granted in part
Legal Topics
Pension Scheme Winding Up, Partial Buyout, Section 75 Pensions Act 1995, Guaranteed Minimum Pension (gmp), Interpretation of Trust Deed and Rules
Pensions Trusts Employment Pension Scheme Winding Up Partial Buyout Section 75 Pensions Act 1995 Guaranteed Minimum Pension (gmp) Interpretation of Trust Deed and Rules

Case Brief

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Parties

Roger Ivor Sarjeant

Claimant

Philip Howard Burditt

Claimant

Frank Holden

Claimant

Rigid Group Limited

Defendant

Procedural Posture

Chancery Division Pension Scheme Construction / Judgment After Hearing on Construction of Pension Scheme Rules

Legal Issues

  1. 1 Whether the scheme rules permit trustees to implement a staged or partial buyout (Headway arrangement) during winding up
  2. 2 Whether the scheme rules permit partial buyout of Guaranteed Minimum Pension (GMP) rights without member consent

Ratio Decidendi

The scheme rules, properly construed, permit the trustees to implement a staged or partial buyout (Headway arrangement) during winding up, as there is no requirement that the winding up be achieved in a single step, and the rules allow for the purchase of multiple policies over time. However, in relation to GMP rights, the overriding appendix requires that any transfer or buyout of GMPs must secure the whole accrued entitlement, so a partial buyout of GMPs is not permitted without member consent.

Court Disposition

Declaration granted in part

Orders

  • Trustees are permitted under the scheme rules to implement a staged or partial buyout (Headway arrangement) during winding up.
  • Trustees are not permitted to effect a partial buyout of GMP rights without the consent of the member involved.