Thales UK Ltd v Thales Pension Trustees Ltd & Ors

Thales UK Ltd v Thales Pension Trustees Ltd & Ors

The introduction of the UK House Price Index (UK HPI) into the RPI constitutes a material change in the compilation of the RPI within the meaning of the Scheme rules. This triggers the obligation on the Principal Employer, with the agreement of the Trustees, to determine the nearest alternative index. However, RPI...

Source-derived case information.

Parties
Claimant: Thales UK Limited; Defendant: Thales Pension Trustees Limited; Defendant: Thales Pension Trustees (Section 1) Limited; Defendant: Thales Pension Trustees (Section 2) Limited
Jurisdiction
England and Wales
Judgment Date
31 March 2017
Procedural Posture
Part 8 Claim (construction of Pension Scheme Rules) / High Court Judgment
Outcome
Declaratory judgment (construction of pension scheme rules)
Legal Topics
Interpretation of Pension Scheme Rules, Indexation of Pension Benefits, Statutory Construction, Trustee Duties, Employer Powers in Pension Schemes
Pensions Law Trusts Law Contract Law Interpretation of Pension Scheme Rules Indexation of Pension Benefits Statutory Construction Trustee Duties Employer Powers in Pension Schemes

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Summary, issues, holding and outcome

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Parties

Thales UK Limited

Claimant

Thales Pension Trustees Limited

Defendant

Thales Pension Trustees (Section 1) Limited

Defendant

Thales Pension Trustees (Section 2) Limited

Defendant

Procedural Posture

Part 8 Claim (construction of Pension Scheme Rules) / High Court Judgment

Legal Issues

  1. 1 Whether the compilation of the Retail Prices Index (RPI) has been materially changed within the meaning of the Scheme rules
  2. 2 Whether the introduction of the UK House Price Index (UK HPI) into RPI constitutes a material change
  3. 3 What is the correct approach to determining the 'nearest alternative index' under the Scheme rules

Ratio Decidendi

The introduction of the UK House Price Index (UK HPI) into the RPI constitutes a material change in the compilation of the RPI within the meaning of the Scheme rules. This triggers the obligation on the Principal Employer, with the agreement of the Trustees, to determine the nearest alternative index. However, RPI as altered by the introduction of UK HPI remains the nearest alternative index and must continue to be used. The power to select an alternative index is a one-off obligation following a material change, not a recurring one. Routine changes or changes in effect alone do not constitute material changes in compilation.

Court Disposition

Declaratory judgment (construction of pension scheme rules)

Orders

  • RPI continues to be published.
  • The compilation of RPI has materially changed as a result of the introduction of UK HPI into it.