CH-2024-000162 - [2025] EWHC 2237 (Ch)

These comprise a ‘special edition’ of the rules of the Scottish & Newcastle Retail Managers Pension Scheme concluded between Scottish & Newcastle plc (as Principal Employer) and the Trustee;

Those rules set out special benefits for members who transferred into the Scheme with effect from 1 May 1995 and who were immediately before that date members of the Scottish & Newcastle Staff Pension Scheme;

The Scheme is a Final Salary Scheme with a Normal Retirement Date of a member’s 60^th birthday;

The 2001 Rules explain how the member’s relevant basic salary is identified for the purpose of calculating the member’s Final Salary;

For that purpose, the relevant basic salary is reduced by the “Pensionable Deduction”, namely the “lower earnings limit for National Insurance contributions in force at the time in question” or such other amount as may be agreed between the Principal Employer and the Trustee;

Final Salary cannot exceed the amount of the “Earnings Cap” at the relevant date of calculation, such cap defined as the “amount specified from time to time for the purpose of section 590C of the Income and Corporation Taxes Act 1988 (earnings cap)” (since repealed);

Rule 5 of the 2001 Rules contains specific provisions as to a member’s entitlement to a pension in different scenarios. So, for example, in the paradigm case of a member leaving employment at Normal Retirement Date, that member will receive a pension for life at the rate of 1/60^th of Final Salary for each year of relevant pensionable service, with a maximum pension of two thirds of Final Salary (Rule 5.1);

Rule 5 also envisages different scenarios in which, for example, the member stays in employment after Normal Retirement Date (Rule 5.2) (with the potential for an increased pension) and a member leaves employment beforehand on account of incapacity (with the potential for an immediate pension in an amount depending on whether such incapacity is partial or total) (Rules 5.3-5.4);

Rule 5.5 envisages a member leaving the employment of a participating employer before “State pension age” (as defined in Rule 5.5 itself). Where a member in that scenario is entitled to a pension from the Scheme, that member’s Final Salary will be calculated without reduction by the Pensionable Deduction. Any increases to the member’s pension during the period referable to that ‘supplement’ will not continue to be paid after “State pension age”; and

Importantly for the purpose of the present appeal, “State pension age” is defined in Rule 5.5 in the following terms:-

“For the purpose of this Rule, State pension age has the meaning given by the rules in paragraph 1 of Part I of Schedule 4 to the Pensions Act 1995 (rules for equalisation of pensionable ages for men and women).”