The BBC has been granted permission to appeal a recent High Court ruling on future pension accrual, with a decision from the Court of Appeal expected early next year.

The High Court previously ruled that the BBC could not modify its defined benefit (DB) pension scheme rules to cut future benefits for members of the scheme, although it can make other valid changes without employees' consent.

In the ruling, the judge rejected the BBC's claim that a rule in the pension trust deed which forbids alterations that adversely affect its members' "interests" applies only to benefits they have already accrued.

Instead, the judge found in favour of submissions from the pension scheme that "interests" must include anything that would leave members worse off, stating that the interests in scope have the potential to include a forward-looking element.

However, the BBC has now been granted permission to appeal the ruling, after confirming that it has "good grounds" to have the decision reconsidered by the Court of Appeal.

Commenting on this news, a BBC spokesperson stated: “Like many organisations, the BBC is reviewing its pension options with the aim of providing a more consistent, industry-leading pension offering for all employees and – as a publicly funded organisation – better manage our costs in the best interests of our staff and licence fee payers.

"Following the judgement from the court in May, we sought professional advice and our view is that we have good grounds to have the decision considered further at the Court of Appeal. Our application for permission to appeal was granted on Friday.”

Despite the news of an appeal, legal experts have suggested that schemes with amendment powers which refer specifically to the “interests” of members may wish to consider whether this decision has any implications for the way in which they interpret their amendment power.

"Decisions about restrictions on amendment powers need to be treated with some caution, as each case will turn on the terms of the particular scheme in question," Linklaters stated.

"It is also worth noting that the BBC had not put forward any specific proposals, so the Court was not asked to consider whether any given proposal would "substantially prejudice" members’ interests.

"In practice, this is likely to be a key consideration: an amendment which would change the position of members (and therefore affect their interests) will not always substantially prejudice those interests."

More broadly, Linklaters suggested that the case can act as a "useful reminder" to trustees and employers of the need to carefully examine the amendment power when amending scheme rules, emphasising that "different wording can be approached quite differently by the courts".

Share Story: