5th July 2018 Rosalind Connor comments in The Financial Times on British Airways’ landmark win over pension trustee powers
British Airways (BA) today won its case in the Court of Appeals against its pension scheme trustees, and will not have to pay out £12m in discretionary benefits to the scheme’s members.
Rosalind Connor said that though the figure may seem insignificant to BA, the case is important for deciding the powers trustees have to make changes to pension schemes.
“The BA case revolves around whether trustees of a pension scheme can, if the powers of the scheme rules let them, make changes that provide bigger benefits than the employer wants to provide,” she explained.
“The actual change in liability here is proportionately quite slight (relating to the index used for inflation-proofing pension payments), but there is clearly an underlying principle that matters greatly both to trustees and scheme employers.
“If the trustees have the power to change the rules of the scheme, can they change them to put in better benefits which the employer does not want, has not promised and has to find the money to pay for?”
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