British Airways win ruling over trustee pension powers

Written by Theo Andrew
05/07/18

British Airways (BA) has won an appeal against the High Court which ruled that trustees were allowed to increase retirees pensions by 0.2 per cent.

The Court of Appeal ruled against the May 2017 decision despite one dissenting judge, Lord Justice Patten, who dismissed British Airways’ appeal.

Both Lord Justice Lewison and Lord Justice Peter Jackson reversed the original decision, which was viewed as having “actively and genuinely engaged with the decision-making process”.

A BA spokesperson said: “We are pleased with the decision, which brings clarity over how the scheme should be administered.”

Mayer Brown partner, Stuart Pickford, believes the case highlights the importance of looking at the scope of the powers given to trustees, as well as the reason they were given the powers.

He said: “The dispute here was really that the trustees and the employer took different views on the purpose for which the power of amendment could be exercised.

“The BA case shows that this [i.e. looking at the purpose for which a power was conferred] involves considering the balance of power between the trustees and the employer, so that trustees perform their own constitutional functions and do not stray into the employer's area of responsibility – benefit design will usually be a matter for the employer.”

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