Partner Rosalind Connor comments in FTAdviser on Blatchford going to court to amend wording of its pension scheme rules
An orthotics and prosthetics manufacturer has been forced to go to court to amend the wording of its pension scheme rules drafted 20 years ago, which if left unchanged would have given some of its members a total £10m benefits hike.
Blatchford – the sponsor of the Chas A Blatchford & Sons Limited Group Pension Scheme – saw the High Court approve a rectification to the plan’s 1996 rules, which had dictated that members of the scheme’s category D would receive increases of the greater of 5 per cent and the annual hike in the retail price index.
The original announcement of 1992, when the raise was introduced, dictated that members were entitled to increases to their pensions in payment of the lesser of 5 per cent and the RPI.
But when this was documented in the deed in 1996, a mistake in the wording meant instead of a cap on pension hikes, the rule operated as a collar.
Rosalind Connor, partner at Arc Pensions Law, noted rectification was being used more frequently by pension schemes.
Rosalind commented: “They highlight a fundamental problem that if you find that the pension scheme documents don’t fit with what people, or at least some of the people, think should be the rules, it is not easy to fix.”
“Most schemes have some problems of this nature, so it is a very common issue.”
Read Rosalind’s comments in FTAdviser
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