British Airways loses High Court case over trustees' discretionary pensions increase

Written by Talya Misiri
19/05/17

British Airways has lost its High Court appeal to prevent its trustees’ discretionary increase to retirees’ pensions, it has been announced.

In response to British Airways, the High Court Chancery Division noted that the company’s challenge of its trustees’ discretionary increase of 0.2 per cent from 1 December 2013 was not justified.

Following a lengthy court process, Justice Morgan said in the report released today, 19 May 2017: “I have now considered all of BA’s challenges to the trustees’ decision to amend rule 15 and to their decision on 19 November 2013 to award a discretionary increase of 0.2 per cent with effect from 1 December 2013. On examining each of these challenges, I am satisfied that the challenges must fail.”

The trustees’ decision, along with member-nominated trustees, was viewed as having “actively and genuinely engaged with the decision-making process”.

The Court also ruled against British Airways’ plea, stating that the decision made on 19 November 2013 “did not change the purposes of the scheme, the purposes of the scheme included the delivery of the benefits defined from time to time by the scheme; the trustees had unilateral power… to define the benefits of the scheme”.

In addition, it was stated that while the trustees’ decision made on 26 June 2013 to make the same increase was not valid as they had not determined a date for the increase, the later decision on 19 November “had regard to all relevant considerations and to no irrelevant considerations”.

“The result of these conclusions is that BA is entitled to a declaration that the trustees of the APS did not, on 26 June 2013, make an effective decision to award a discretionary increase but, otherwise, BA’s claims will be dismissed,” Morgan concluded.

Related Articles

Cautious optimism in a challenging world
Matthew J. Bullock, Investment Director, Global Multi-Asset Strategies, Wellington Management, meets Francesca Fabrizi to discuss how multi-asset strategies can help investors

Latest News Headlines
Adam Cadle provides a summary of the big pensions stories to have hit the headlines this week
Most read stories...
World Markets (15 minute+ time delay)