They Do Things Differently Up There…

For those of my readers who may not be pension experts, a little reminder. Since 17 May 1990 and the Barber decision in the European Court of Justice, men and women have had equal pension benefits applied to them. The decision (and various subsequent and refining judgements) have said that the disadvantaged sex must be given the same rights as the advantaged sex unless and until schemes were amended to ‘level down’ all the benefits equally. Typically this meant that men who had a Normal Retirement Age of 65 would be able to take any benefits that accrued to them after 17 May 1990 at age 60 – the NRD for women – without any actuarial reduction for early payment. However schemes could be amended to make NRD 65 for both sexes. The period between 17 May 1990 and the amendment date is called the Barber Window.

Still with me? Jolly good! Now, many schemes got very worried by the Barber window and sought to close it as soon as possible. Unfortunately this was often achieved without too much attention being paid to the strict amendment powers of the scheme rules. The English courts have considered this and have said, most notably in the Trustee Solutions v Dubery case, that unless the amendment requirements were strictly adhered to (for example if it required amendment by Deed, a scrappy piece of paper calling itself an Announcement just wouldn’t do) then the amendment was not valid and the Barber window remained open. Much wailing and gnashing of teeth as schemes already in deficit suddenly faced a liability for which they hadn’t properly funded!

Now our friends North of the Border have put something of a coach and horses through that principle in a case called Low and Bonnar v Mercer Limited. Lord Drummond Young (for it was he) has declared that the Scottish language is somewhat different to that of English and the word ‘Deed’ did not mean quite the same thing and had no technical meaning in Scottish law. Consequently if a scheme required an amendment to be by Deed in Scotland, that could in fact merely imply some form of formal writing such as a Board Minute.  Well, lots of rejoicing in Edinburgh and Glasgow then but not much comfort for us in the South where equalisation remains one of the thorniest problems we pension lawyers are having to deal with.

It’s enough to drive one to drink…mine’s a good single Malt…

Jennie Kreser advises on pensions law and can be contacted on +44 (0)20 7749 2700 or jik@silvermansherliker.co.uk.

You can also read Jennie’s blog here: http://www.pensionlawyerblog.com/pension-equalisation-scotland and follow her on Twitter