Case details

Barnardo's (Appellant) v Buckinghamshire and others (Respondents)

Case ID: UKSC 2016/0210

Case summary

Issue(s)

The proper construction of terms of a Pension Scheme: whether Trustees have the power to adopt an alternative index from the Retail Prices Index ("RPI"), when RPI remains an officially published index, notwithstanding RPI having been superseded (and in that sense "replaced") by the Consumer Price Index as the government’s front-line inflation measure (including for the purposes of pensions’ uprating).

Facts

The Appellant is the principal employer of an occupational pension scheme. The rules of the pension scheme allow increases to be made in pension payments in line with Retail Prices Index ("RPI"), which is defined in the rules as "the General Index of Retail Prices published by the Department of Employment or any replacement adopted by the Trustees without prejudicing [Revenue] Approval." The Appellant requested the Trustees of the Pension scheme to substitute the Consumer Price Index ("CPI") instead of RPI for the increases in pension payments, contending that the rules allowed the Trustees to adopt another index to replace RPI. Substituting CPI would significantly reduce the deficit in the pension fund, but would be likely significantly to reduce future increases in pensions payable to pensioners. Conversely, using RPI would result in a call on the resources of the Appellant (£36m to £74m depending on actuarial basis) diminishing the funds available for the Appellant’s charitable projects. The Respondents commenced Part 8 proceedings to determine if they had such a power. The judge held that the correct interpretation of the rules was that the Trustees therefore did not have the power to adopt CPI as a replacement to RPI. There was no "replacement" of RPI within the meaning of the definition of RPI in the 1988 Rules, so long as RPI remained an officially published index. Replacement was something which occurs in relation to RPI which is independent of its use for the purposes of the Scheme. The Trustees cannot adopt an index and automatically render it a replacement index.

Judgment appealed

[2016] EWCA Civ 1064

Parties

Appellant(s)

Barnardos

Respondent(s)
  1. Miles Buckinghamshire and others
  2. Janet Forest
  3. Malcolm Dick

Appeal

Justices

Lady Hale, Lord Wilson, Lord Sumption, Lord Hodge, Lord Briggs

Hearing start date

11 Jun 2018

Hearing finish date

11 Jun 2018

Watch hearing
11 June 2018 Morning session Afternoon session