CMG PENSION TRUSTEES LIMITED v CGI IT UK LIMITED

I. Preliminary Matters

“2. An order pursuant to CPR 19, r 7 appointing the Claimant to represent all those persons actually or potentially entitled under the Scheme interested to argue that questions 26 to 32 above are to be answered in the manner that results in larger payments being made to members; that question 33.1 and 33.2.1 are to be answered in the affirmative and question 33.2.2 and 33.3 are to be answered in the negative;

3. An order pursuant to CPR 19, r 7 appointing the First Defendant to represent all current and former employers of the Scheme and all those persons actually or potentially entitled under the Scheme interested to argue that questions 26 to 32 above are to be answered in the manner that results in smaller or no payments being made to members; that question 33.1 and 33.2.1 are to be answered in the negative and questions 33.2.2 and 33.3 are to be answered in the affirmative.”

II. Statutory Background

(1) The Social Security Act 1973

“(1) No rule must operate so as to deprive a person of short service benefit (whether a member himself, or a member's widow or widower or dependant) by reference to— (a) failure by him or any other person to make a claim for the benefit or for any payment due as benefit; or (b) failure by him or any other person, at any time after termination of pensionable service, to give any notice, or comply with any formality, required by the scheme as a condition of entitlement.

(2) Sub-paragraph (1)(a) above is not to prevent reliance on any enactment relating to the limitation of actions; and in cases of failure to claim, the scheme may provide for the right to receive any payment to be forfeited in the event of its not being claimed within 6 years of the date on which it became due.”

“(1) A scheme must contain no rule enabling a member's employer to exercise any description of charge or lien on, or set-off against, short service benefit, to the extent that it includes transfer credits; but a charge or lien on, or set-off against, a member's short service benefit is permissible (insofar as it does not include transfer credits) for the purpose of enabling the employer to obtain the discharge by the member of some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or commission by the member.”

(2) The Social Security Pensions Act 1975

“(2) For the purposes of the said section 39(4)(b) the circumstances in which schemes may provide for an earner's or widow's guaranteed minimum pension (whether current or prospective) to be forfeited are—

(a) where the person entitled to that benefit has been convicted of— (i) an offence of treason, or (ii) one or more offences under the Official Secrets Acts 1911-1939 for which he has been sentenced on the same occasion to a term of imprisonment of, or to 2 or more consecutive terms amounting in the aggregate to, at least 10 years;

(b) in the case of a widow's guaranteed minimum pension, where the earner by reference to whose contracted-out employment that pension is payable had been convicted of an offence of treason, or had been convicted of offences and had been sentenced to terms of imprisonment as set out in sub-paragraph (a)(ii) above;

(c) in the case of any payment of guaranteed minimum pension for which a claim has not been made, where a period of at least 6 years has elapsed from the date on which that payment became due; or

(d) in the case of any guaranteed minimum pension payable under a scheme for members of Her Majesty's forces, being a scheme for which the Secretary of State is responsible, where the person entitled to that benefit or, as the case may be, the member of such forces has in the opinion of the Secretary of State committed an act which is gravely prejudicial to the defence, security or other interests of the state; and where forfeiture of an earner's guaranteed minimum pension is permitted by this sub-paragraph, the prospective widow's guaranteed minimum pension may also be forfeited.”

(3) The Pension Schemes Act 1993

“(1) Where the annual rate of a pension required to be provided by a scheme in accordance with section 13 or 17 would not exceed the prescribed amount and the circumstances are such as may be prescribed, the scheme may provide for the payment of a lump sum instead of that pension.

(2) Neither section 13 nor section 17 shall preclude a scheme from providing for the earner's or the earner's widow's or widower's guaranteed minimum pension to be suspended or forfeited in such circumstances as may be prescribed.”

“(1) For the purposes of section 21(2) of the 1993 Act (suspension and forfeiture of guaranteed minimum pension) the circumstances in which a scheme may provide for an earner's or an earner's widow's or widower's guaranteed minimum pension to be suspended are—

(a) that the pensioner is, in the opinion of the trustees of the scheme, unable to act by reason of mental disorder or otherwise and there is provision in the scheme for sums equivalent to the guaranteed minimum pension to be paid or applied, while the pensioner is so unable, for the maintenance of the pensioner or, at the discretion of the trustees, of the pensioner together with his dependants or of his dependants only, and to the extent that they are not so applied, to be held for the pensioner until he is again able to act or, as the case may be, for his estate;

(b) that the pensioner is in prison or detained in legal custody, and there is provision in the scheme for sums equivalent to the guaranteed minimum pension to be paid or applied during such circumstances for the maintenance of such one or more of the pensioner's dependants as the trustees of the scheme may in their discretion determine; and

(c) that the earner is re-employed by the employer who had previously employed him in contracted-out employment in respect of which the guaranteed minimum pension became payable or in any other employment to which the scheme paying the guaranteed minimum pension applies and there is provision in the scheme for the guaranteed minimum pension which becomes payable when the suspension is lifted to be increased in accordance with section 15(1) of the 1993 Act.

(2) For the purposes of section 21(2) of the 1993 Act the circumstances in which a scheme may provide for an earner's or an earner's widow's or widower's guaranteed minimum pension (whether current or prospective) to be forfeited are—

(a) that the person entitled to that pension has been convicted of— (i) an offence of treason, or (ii) one or more offences under the Official Secrets Acts 1911 to 1989 for which he has been sentenced on the same occasion to a term of imprisonment of, or to two or more consecutive terms amounting in the aggregate to, at least 10 years;

(b) in the case of a widow's or widower's guaranteed minimum pension, that the earner by reference to whose contracted-out employment that pension is payable has been convicted of an offence of treason, or has been convicted of offences and has been sentenced to terms of imprisonment as set out in sub-paragraph (a)(ii);

(c) in the case of a guaranteed minimum pension payable under a scheme for members of Her Majesty's forces, being a scheme for which the Secretary of State is responsible, that the person entitled to that pension or, as the case may be, the member of the forces whose widow or widower is currently or prospectively entitled to that pension, has in the opinion of the Secretary of State committed an act which is gravely prejudicial to the defence, security or other interests of the State; and

(d) in the case of any payment of guaranteed minimum pension for which a claim has not been made, that a period of at least 6 years has elapsed from the date on which that payment became due.” (Footnote: ¹)

(4) The Pensions Act 1995

“Except in relation to GMPs and short service benefits, scheme documents are free to provide any other grounds of forfeiture which is not inconsistent with legislation (such as discrimination), even if not involving misconduct. We consider that a fortiori such provisions should be made void.”

“(1) Subject to subsection (5), where a person is entitled to a pension under an occupational pension scheme or has a right to a future pension under such a scheme — (a) the entitlement or right cannot be assigned, commuted or surrendered, (b) the entitlement or right cannot be charged or a lien exercised in respect of it, and (c) no set-off can be exercised in respect of it, and an agreement to effect any of those things is unenforceable.

(2) Where by virtue of this section a person's entitlement to a pension under an occupational pension scheme, or right to a future pension under such a scheme, cannot, apart from subsection (5), be assigned, no order can be made by any court the effect of which would be that he would be restrained from receiving that pension.”

“(1) Subject to the provisions of this section and section 93, an entitlement to a pension under an occupational pension scheme or a right to a future pension under such a scheme cannot be forfeited.

(2) Subsection (1) does not prevent forfeiture by reference to— (a) a transaction or purported transaction which under section 91 is of no effect, whether or not that event occurred before or after the pension became payable.

(3) Where such forfeiture as is mentioned in subsection (2) occurs, any pension which was, or would but for the forfeiture have become, payable may, if the trustees or managers of the scheme so determine, be paid to all or any of the following— (a) the member of the scheme to or in respect of whom the pension was, or would have become, payable, (b) the spouse, civil partner, widow, widower or surviving civil partner of the member, (c) any dependant of the member, and (d) any other person falling within a prescribed class.

(4) Subsection (1) does not prevent forfeiture by reference to the pensioner, or prospective pensioner, having been convicted of one or more offences—(a) which are committed before the pension becomes payable, and (b) which are— (i) offences of treason, (ii) offences under the Official Secrets Acts 1911 to 1989 for which the person has been sentenced on the same occasion to a term of imprisonment of, or to two or more consecutive terms amounting in the aggregate to, at least 10 years, or (iii) prescribed offences.

(5) Subsection (1) does not prevent forfeiture by reference to a failure by any person to make a claim for pension— (a) where the forfeiture is in reliance on any enactment relating to the limitation of actions, or (b) where the claim is not made within six years of the date on which the pension becomes due.

(6) Subsection (1) does not prevent forfeiture in prescribed circumstances.

(7) In this section and section 93, references to forfeiture include any manner of deprivation or suspension.”

“(1) Subject to subsection (2), section 92(1) does not prevent forfeiture of a person's entitlement to a pension under an occupational pension scheme or right to a future pension under such a scheme by reference to the person having incurred some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or omission by the person.

(2) A person's entitlement or right may be forfeited by reason of subsection (1) to the extent only that it does not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person's entitlement or right.

(3) Such forfeiture as is mentioned in subsection (1) must not take effect where there is a dispute as to the amount of the monetary obligation in question, unless the obligation has become enforceable under an order of a competent court or in consequence of an award of an arbitrator or, in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.

(4) Where a person's entitlement or right is forfeited by reason of subsection (1), the person must be given a certificate showing the amount forfeited and the effect of the forfeiture on his benefits under the scheme.

(5) Where such forfeiture as is mentioned in subsection (1) occurs, an amount not exceeding the amount forfeited may, if the trustees or managers of the scheme so determine, be paid to the employer.”

III. The Scheme

(1) The 1981 Deed and Rules

“(A) The Principal Company hereby confirms the establishment of the Scheme as provided by the Interim Trust Deed aforesaid the objects whereof are to provide Relevant Benefits for the Members of the Scheme from time to time in accordance with these presents and the Rules as from time to time amended.

(B) The Principal Company covenants with the Trustees to pay or cause to be paid to the Trustees all contributions to be contributed to the Fund in accordance with the Rules together with any expenses of administration which the Trustees cannot meet out of the assets held by them without prejudicing the benefits to be provided under the Scheme.

(C) All contributions under the Rules and other assets of the Scheme and any other moneys or assets received or to be received in respect of or for the purposes of the Scheme shall be vested in the Trustees who shall stand possessed thereof upon irrevocable trust to hold apply and dispose of the same as provided by the Trust Deed and the Rules.”

“The Trustees may at any time with the consent of the Principal Company and without the concurrence of the Members by deed alter or repeal all or any of the provisions of this Deed or of the Rules for the time being in force and may·-make any new provisions to the exclusion of or in addition to all or any of the existing provisions and any provisions so made shall be subject in like manner to be altered or modified. Any alteration, repeal or addition which may be effected in the exercise of the power herein contained shall be notified to the Members by posting the same in some conspicuous place in the works and offices of the Employers provided always that:

(i) no alteration, repeal or addition shall without the written consent of the Member operate so as to affect or prejudice the rights or interests of any person already a Member or any person receiving benefit by virtue of the Membership of any deceased Member insofar as they concern benefits secured in respect of Service prior to the date of such alteration, modification or addition except insofar as any such operation (whether retrospective or otherwise) may be necessary in order to secure approval or continued approval of the scheme under the Finance Act 1970 or other relevant legislation under which the approval of the Inland Revenue Authorities to the Scheme has been received or is sought.

(ii) no alteration, repeal or addition shall operate so as to adversely affect or prejudice any pension in course of payment at the date of such alteration, modification or addition or to adversely affect or prejudice the rights or interests of any Member whose Participating Membership had ceased at or prior to the date of such alteration, modification or addition.

(iii) there shall be no alteration which shall result in the return to any of the Employers of any part of the Fund except for a fortuitous surplus upon the winding-up of the Scheme.”

“The Trustees with the consent of the Principal Company may (i) increase the pension or other benefits payable under the Rules to or on the death of any Member (ii) provide pension for the surviving spouse or any other Dependant of any Member and increase the same (iii) provide pension and other benefits to or on the death of any former employee of any of the Employers and increase such pension

Provided that (a) the total pension or other benefits payable to or on the death of any Member or to any surviving spouse or other Dependant of any Member shall not exceed any maximum specified in the Rule headed Limitation of Benefits, and (b) any lump sum payable under the provisions of Rule 9 (c) and (d) shall not be increased (other than as a consequence of an earlier increase in the Member's pension to which any lump sum is related) and no further lump sum shall be payable to the Member after the commencement of pension payments to him, and (c) before granting any pension or other benefit under (iii) above the Trustees shall obtain confirmation from the Commissioners of Inland Revenue that the approval of the Scheme under Chapter II of Part II of the Finance Act 1970 shall not be prejudiced, and (d) the Employer shall if required by the Trustees pay such additional contributions as may be necessary to provide such additional benefits under (i) (ii) or (iii) above.”

“(b) Notwithstanding anything contained in these Rules a Member's Employer shall be entitled to a charge or lien on or set off against (as may be appropriate) any benefit or prospective benefit to which the Member may become entitled under the provisions of these Rules for the purpose of enabling the Employer to obtain the discharge by the Member of some monetary obligation due to the Employer and arising out of a criminal, negligent or fraudulent act or omission by the Member. Provided that:

(i) in respect of any such obligation, the amount recovered by the Employer out of the Fund shall be limited to the actuarial value of the Member’s accrued benefits (whether actual or prospective) at the time of such recovery or the amount of the obligation whichever shall be the less (subject to any different agreement in writing between the Employer and the Member), and

(ii) the Member shall be entitled to a certificate showing the amount recovered and its effect on his benefits or prospective benefits, and

(iii) in the event of any dispute as to the amount to be recovered the Employer shall not be entitled to enforce such charge lien or set off except after the obligation has become enforceable under an order of a competent court or the award of an arbitrator or in Scotland an arbiter to be appointed (failing agreement between the parties) by the Sheriff

(iv) notwithstanding (i) above the Employer shall have no entitlement to recovery out of the Fund in respect of any benefits or prospective benefits granted in relation to a transfer payment to the Fund in accordance with the provisions of Clause 15 of the Trust Deed.”

“If a Member becomes bankrupt or attempts to assign charge or in any way to anticipate other than as provided by these Rules the benefits to which during his lifetime he may be entit1ed under the Scheme then all rights and benefits defined by the Rules in respect of such Member shall vest in the Trustees who in cases of hardship may at their discretion apply such amounts as would otherwise be due to the Member in such manner and in such proportions as they may decide for the benefit of the Member or his Dependants provided that no such payment shall be made directly or indirectly to or for the benefit of any purported assignee.”

“(a) Any benefit or instalment thereof payable under the Scheme which is not claimed within six years of the event giving rise to the due date of payment of such benefit or instalment thereof as the case may be shall, unless the Trustees otherwise determine, be forfeited and the proceeds shall revert to the Fund.

(b) In the event that the Crown or the Duchy of Lancaster or the Duchy of Cornwall or any foreign country or state or agency or other authority thereof would become entitled directly or indirectly to a deceased’s estate to which, apart from the provisions of this paragraph (b), there would be any benefit payable under the Scheme, such benefit shall revert to the Fund.”

(2) The 1988 Deed and Rules

“18.1 Non-Assignability

The benefits under the Scheme are strictly personal and may not be assigned, whether in security or otherwise mortgaged. or otherwise disposed of except as provided in the Rules.

18.2 Bankruptcy Or Attempted Anticipation Of Benefits

If a Member becomes bankrupt or attempts to assign charge or in any way to anticipate other than as provided by these Rules the benefits to which during his lifetime he may be entitled under the Scheme then all rights and benefits defined by the Rules in respect of such Member shall vest in the Trustees who in cases of hardship may at their discretion apply such amounts as would otherwise be due to the Member in such manner and in such proportions as they may decide for the benefit of the Member or his Dependants provided that no such payment shall be made directly or indirectly to or for the benefit of any purported assignee.”

“20.1 Benefit Lien

20.1.1 Subject to Rules 23 and 24 the Trustees at the request of the Principal Employer may reduce the benefit entitlement in respect of a Member under the Scheme by an amount equivalent to any debt or liability due to an Employer arising out of the Member's criminal, negligent or fraudulent act or omission provided that

(i) the amount recovered shall not exceed the lesser of (a) the amount of the debt or liability, and (b) the actuarial value calculated by the Trustees on a basis certified as reasonable by an Actuary of the actual or prospective benefits in respect of the Member under the Rules on the date on which the debt or sum is established,

(ii) any benefit derived from a transfer value received under Rule 13.1 shall be exempted from the provisions of this Rule unless the Occupational Pension Board specifically consent otherwise,

(iii) the Member shall be given a certificate by the Trustees showing the amount recovered and the effect on his benefit entitlement, and

(iv) in the event that the Member and the Employer are in dispute as to the amount due to be recovered the Trustees shall only be enabled to act in the foregoing terms after receiving satisfactory evidence of either the Member's acceptance in writing or an order enforceable in a court of law or the award of an arbitrator or arbiter, of the amount to be recovered.

20.2 Benefit Forfeiture

Notwithstanding Rule 24 if a benefit or instalment of benefit is not claimed by or on behalf of the person entitled to the benefit or instalment in accordance with these Rules within 6 years of its date of payment it shall be retained by the Trustees for the purposes of the Fund.”

“24.1.1 The provisions of this Rule shall apply to any employment which becomes a contracted-out employment by reference to the Scheme from the date that such employment is contracted-out and the provisions of Rule 24 shall override any other provisions of the Scheme which are inconsistent therewith in relation to such contracted-out employment except the provisions of Rule 21.

24.1.2 The provisions of this Rule take the place of and cancel the provisions of any previous rule or provision adopted under interim documentation to satisfy the requirements of the 1975 Act.”

(3) The 1991 Deed

(4) The 1992 Deed

(5) The 1995 Deed and Rules

“(a) The amount of pension payable to the widow shall not exceed the Maximum Widow's, Widower's or Dependant's Pension nor shall the provision of any pension payable to any other person under Rule 9.0 cause this limit to be exceeded.

(b) No pension shall be payable if the whole of the pension in respect of the Member has been commuted for a cash sum in accordance with the provisions of Rule 7.2.

(c) In cases where at the time of the Member's death he was not living with his lawful spouse (and whether or not such spouse was dependent upon the Member for the provision of all or any of the ordinary necessaries of life) the Trustees shall have a discretion to pay a pension not exceeding the difference between the amount of pension payable under Rule 9.1 above and the amount of GMP (if any) payable to his lawful spouse in accordance with the provision of the paragraph below to any other Dependant of the Member selected by them and to the extent that they exercise the discretion hereby conferred the rights of the lawful spouse of the Member shall be abrogated in whole or in part, as the case may be.

The Widow's GMP or Widower's GMP, as appropriate, in respect of a Contracted-out Member shall be payable to the spouse and only the value of the pension in excess of the Widow's GMP or Widower's GMP shall be applied to provide pension of the amount calculated by the Administrator on the life of any one or more of the Member's Dependants which the Trustees in their absolute discretion shall decide.

(d) If a Member marries after termination of his Pensionable Service and dies within six months of such marriage, the pension payable to a spouse under Rule 9.1 shall not exceed the Widow's GMP or Widower’s GMP.

(e) Where a surplus arises under this Rule on account of the operation of conditions (a) or (c) above, it shall be retained by the Trustees for the purposes of the Fund.

(f) If at the date of payment of the widow's pension the aggregate amount of pension payable to the widow under the Scheme and all other retirement benefit schemes {as defined in Section 611(1) of the Taxes Act) relating to the Employer does not exceed £104 per annum (or any other amount prescribed by regulations made under Section 77(5)(6) of the 1993 Act and consistent with Revenue Approval), an equivalent cash sum calculated by the Trustees on a basis certified as reasonable by an Actuary may be paid to the widow in lieu of such widow's pension under the Scheme.”

(6) The 1995 Announcement

(7) The 1997 Announcement

(8) The 1998 Deed

(9) The 2000 Deed and Rules

“(i) the relevant provisions of the Former Definitive Deed shall apply in respect of the payment of any benefit or instalment thereof which was due to be made prior to the Revision Date

(ii) each person who on the Revision Date is under the Former Definitive Deed – (a) in receipt of a Pension or (b) entitled to payment of a deferred Pension which has not commenced to be paid or (c) contingently entitled to payment of a Pension or other benefit on the death of a person to whom (a) or (b) above applies

is entitled under the Principal Deed to a Pension or other benefit of the same amount payable at the same time for the same period and subject to the same guarantee as the Pension or other benefit to which that person is entitled under the Former Definitive Deed and in its application to such person any reference in the Principal Deed to a Member or other beneficiary shall be construed accordingly”

“3.1 General restrictions

The benefits payable under or by reference to rule 3 shall be subject to any other provision in the Principal Deed affecting the amount or payment thereof and to the provisions of any order made by a United Kingdom court in consequence of the Member's divorce

3.2 Pension on Retirement at Normal Retirement Date

On the Normal Retirement Date an Active Member shall be entitled to a Pension equal in amount to the Retirement Pension and payable for life from the Normal Retirement Date in accordance with and subject to rules 3.4 and 3.6 and such Pension shall if necessary be increased to an amount which satisfies the requirements of section 87(3) of the Pension Schemes Act”

“3.7 Commutation Option

A Member who on his Retirement Date is entitled to a Pension under rule 3 may by written request to the Trustees on or before his Retirement Date and subject to rule 2.4 elect to commute such Pension or part thereof for a lump sum not greater in amount than the Retirement Lump Sum and thereupon such Pension shall be reduced by the pension equivalent (calculated in accordance with rule 3.8) of the lump sum payable or cancelled as appropriate PROVIDED THAT -

(i) the Trustees shall subject to rule 5.1 commute any Pension which when aggregated with any Pensions payable to that Member from all Associated Schemes (as defined in Schedule I) is not more than the Trivial Amount whether the Member so requests or not

(ii) the Trustees may at the Member's written request and with the agreement of the Board of Inland Revenue (where required) commute his Pension or any part thereof if he is in exceptionally serious ill health (that is to say Incapacity which in the opinion of the Trustees acting on the advice of a registered medical practitioner reduces the Member's expectation of life to less than one year)

(iii) any lump sum payable hereunder shall not be paid before the Retirement Date EXCEPT THAT - (a) in respect of a Member other than a Class A Member (as defined in Schedule I) who is entitled to a Pension under rule 3.4 such lump sum may with his Employer's consent be paid at any time on or after the Normal Retirement Date but if a lump sum is paid under the Scheme before a Member's Retirement Date no further lump sum shall be payable to the Member hereunder and (b) in respect of a Member who is entitled to Preserved Pension whereof payment is to commence before Normal Retirement Date in accordance with rule 3.21 such lump sum may be paid on the date whereon payment of the Preserved Pension is to commence

(iv) the Trustees shall commute any Pension or part of such Pension which is required to be commuted under the provisions of an order made by a United Kingdom court in consequence of the Member's divorce”

“3.9 Death in Service lump sum benefits

In the event of the death of a Member in Service (other than a Member who has ceased to be an Active Member in accordance with rule 1.5 or 1.6) there shall be payable in accordance with and subject to rule 3.12 the Lump Sum Death Benefit and if such death occurs before Normal Retirement Date a refund of contributions equal to the Member's Fund

…….

3.12 Payment of Lump Sum Death Benefits

The Trustees shall have power to pay or apply any lump sum which may be payable on the death of a Member to or for the benefit of all or any one or more to the exclusion of the other or others and in such proportions as the Trustees decide of -

(b) the parents or grandparents (whether by blood or adopted) of the Member

(c) any person (except the Member) who is the child or remoter issue (whether by blood or adopted) of such grandparents and the spouse of any such person

(d) any other person or persons (including for this purpose any charity society club or other similar organisation) whom the Member has in a written notice to the Trustees nominated as a beneficiary of such lump sum or part thereof or

(e) the personal representatives of the Member

PROVIDED THAT –

……….

(ii) if the Crown the Duchy of Cornwall or the Duchy of Lancaster shall become entitled directly or indirectly to the Member's estate to which apart from this proviso such lump sum or any remaining part thereof would be payable the same shall forthwith be forfeited and shall be applied by the Trustees to any other object of the Scheme”

“3.27 The Trustees shall have power with the written consent of the Principal Employer -

(a) to increase the amount of any benefit which is payable to or in respect of a Member and which is less than the maximum amount permitted by Schedule I in respect of such benefit to an amount not exceeding the said maximum amount and

(b) to provide for Dependants of a deceased Member a benefit or benefits (being relevant benefits as defined in section 612(1) of the Taxes Act) for which provision is not otherwise made hereunder and increase the same

(c) to provide Pension and other benefits (being relevant benefits as aforesaid) to or on the death of any fonner Employee of any of the Employers and increase the same

PROVIDED THAT –

………

(iii) the Employer or the Member in respect of whom benefits are being augmented shall if required by the Trustees pay such additional contributions (if any) as are determined by the Trustees acting on the advice of the Scheme Actuary to be necessary for the provision of such increase or benefit”

“5.6 Forfeiture or suspension of benefits

Subject to Schedule II the Trustees shall have power to forfeit or suspend the payment of any Pension payable hereunder in the event of the beneficiary thereof charging or attempting to assign the same or such beneficiary's bankruptcy and in the event of such forfeiture or suspension the Trustees may in their absolute discretion pay or continue the payment of the benefit so forfeited or suspended or any part thereof to or for the benefit of any one or more to the exclusion of the others of (a) the beneficiary or (b) the beneficiary's spouse or (c) any Dependent Child of the beneficiary who has not attained age 18 or (d) any other individual who in the opinion of the Trustees is dependent on the beneficiary for maintenance and support at the date of such forfeiture or suspension

PROVIDED THAT no payment of the benefit shall be made to or for the benefit of any individual to whom the benefit was charged or to whom it was attempted to assign the benefit

5.7 Charge on benefits

The Trustees shall have power subject to rule 5.8 at the request of an Employer to exercise a charge lien or set off against any benefit to which a Member employed by such Employer is entitled PROVIDED THAT-

(i) the debt recovered from the Member in consequence of the exercise of such power shall not exceed the lesser of the amount which the Trustees acting on the advice of the Scheme Actuary determine as the cash value of the charged benefit on the date whereon such debt was incurred or the amount of the debt owed to the Employer by the Member

(ii) if the said debt is disputed such power shall not be exercised until the debt becomes enforceable by order of a person or court of competent jurisdiction or the award of an arbitrator or arbiter in Scotland

(iii) the Trustees shall give the Member a certificate showing the debt recovered by the Employer and the reduction (if any) in the said benefit

5.8 No charge lien or set off shall be exercised under rule 5.7 against -

(a) Guaranteed Minimum Pension

(b) the benefit attributable to a Transfer Value

(c) any other benefit unless the debt due to the Employer is the result of a criminal fraudulent or negligent act or omission by the Member

………..

5.11 Benefit forfeiture

Notwithstanding Schedule II if a benefit or instalment of benefits is not claimed by or on behalf of the person entitled to the benefit or instalment in accordance with these Rules within 6 years of its date of payment it shall be retained by the Trustees for the purposes of the Scheme”

“(a) the amount calculated as 1/720 of Pensionable Salary for each complete month of the aggregate of the Member’s Pensionable Service completed prior to 1 April 1997 Past Pensionable Service (if any) and Transferred Pensionable Service (if any) received and accepted under the Scheme prior to 1 April 1997

(b) the amount calculated as 1/960 of Pensionable Salary for each complete month of the aggregate of the Member's Pensionable Service completed after 31 March 1997 and Transferred Pensionable Service (if any) received and accepted under the Scheme after 31 March 1997

(c) the Pension purchased by the Voluntary Contributions (if any) paid by the Member and

(d) in respect of an Active Member for whom a Transfer Value has been received and accepted under the Scheme the Pension which in the opinion of the Trustees acting on the advice of the Scheme Actuary is purchased by such Transfer Value”

“6. If in relation to any Pension payable under the Scheme a Member or his spouse has a Guaranteed Minimum and such Pension is to be forfeited or payment thereof suspended in accordance with the Rules the Guaranteed Minimum Pension in respect of the Member or his spouse shall be forfeited or payment thereof suspended in such circumstances as may be prescribed in regulations made from time to time under section 21(2) of the Pension Schemes Act.”

(10) The 2004 Deed and Rules

(11) The 2010 Deed

IV. The Administration of the Scheme

(1) The Equalisation Issue

(2) The Accrual Rate Issue

(3) The Pensionable Salary Issue

V. Pension Schemes: Construction

(1) Construction

“13 In the trilogy of cases, Rainy Sky SA v Kookmin Bank [2011] UKSC 50; [2011] 1 WLR 2900, Arnold v Britton [2015] UKSC 36; [2015] AC 1619 and Wood v Capita Insurance Services Ltd [2017] UKSC 24; [2017] AC 1173, this court has given guidance on the general approach to the construction of contracts and other instruments, drawing on modern case law of the House of Lords since Prenn v Simmonds [1971] 1 WLR 1381. That guidance, which the parties did not contest in this appeal, does not need to be repeated. In deciding which interpretative tools will best assist in ascertaining the meaning of an instrument, and the weight to be given to each of the relevant interpretative tools, the court must have regard to the nature and circumstances of the particular instrument.

14 A pension scheme, such as the one in issue on this appeal, has several distinctive characteristics which are relevant to the court’s selection of the appropriate interpretative tools. First, it is a formal legal document which has been prepared by skilled and specialist legal draftsmen. Secondly, unlike many commercial contracts, it is not the product of commercial negotiation between parties who may have conflicting interests and who may conclude their agreement under considerable pressure of time, leaving loose ends to be sorted out in future. Thirdly, it is an instrument which is designed to operate in the long term, defining people’s rights long after the economic and other circumstances, which existed at the time when it was signed, may have ceased to exist. Fourthly, the scheme confers important rights on parties, the members of the pension scheme, who were not parties to the instrument and who may have joined the scheme many years after it was initiated. Fifthly, members of a pension scheme may not have easy access to expert legal advice or be able readily to ascertain the circumstances which existed when the scheme was established.

15 Judges have recognised that these characteristics make it appropriate for the court to give weight to textual analysis, by concentrating on the words which the draftsman has chosen to use and by attaching less weight to the background factual matrix than might be appropriate in certain commercial contracts: Spooner v British Telecommunications Plc [2000] Pens LR 65, Jonathan Parker J at [75]–[76]; BESTrustees v Stuart [2001] Pens LR 283, Neuberger J at [33]; Safeway Ltd v Newton [2017] EWCA Civ 1482; [2018] Pens LR 2, Lord Briggs, giving the judgment of the Court of Appeal, at [21]–[23]. In Safeway, Lord Briggs stated ([22]):

“the Deed exists primarily for the benefit of non-parties, that is the employees upon whom pension rights are conferred whether as members or potential members of the Scheme, and upon members of their families (for example in the event of their death). It is therefore a context which is inherently antipathetic to the recognition, by way of departure from plain language, of some common understanding between the principal employer and the trustee, or common dictionary which they may have employed, or even some widespread practice within the pension industry which might illuminate, or give some strained meaning to, the words used.”

I agree with that approach. In this context I do not think that the court is assisted by assertions as to whether or not the pensions industry in 1991 could have foreseen or did foresee the criticisms of the suitability of the RPI, which later emerged in the public domain, or then thought that it was or was not likely that the RPI would be superseded.

16 The emphasis on textual analysis as an interpretative tool does not derogate from the need both to avoid undue technicality and to have regard to the practical consequences of any construction. Such an analysis does not involve literalism but includes a purposive construction when that is appropriate. As Millett J stated in Courage Group’s Pension Schemes, Re [1987] 1 WLR 495, p.505 there are no special rules of construction applicable to a pension scheme but “its provisions should wherever possible be construed to give reasonable and practical effect to the scheme”. Instead, the focus on textual analysis operates as a constraint on the contribution which background factual circumstances, which existed at the time when the scheme was entered into but which would not readily be accessible to its members as time passed, can make to the construction of the scheme.

17 It is nevertheless relevant to the construction of pension schemes that they are drafted to comply with tax rules so as to preserve the considerable benefits which the United Kingdom’s tax regime confers on such schemes. They must be construed “against their fiscal backgrounds”: National Grid Co Plc v Mayes [2001] UKHL 20; [2001] Pens LR 121 at [18] per Lord Hoffmann; Stevens v Bell [2002] EWCA Civ 672; [2002] Pens LR 247, Arden LJ at [30]. In this case, the CIR guidance on approval of schemes, which is contained in the practice note on occupational pension schemes (IR 12 (1979)), forms part of the relevant background. In the footnote to para.6.14 of that guidance, the CIR stated:

“Increases in the cost of living may be measured by the index of retail prices published by the Department of Employment or by any other suitable index agreed for the particular scheme by the Superannuation Funds Office.”

It appears therefore that the CIR, in giving discretionary approval to a scheme, would not have objected to a scheme which empowered its trustees to substitute an appropriate index for the RPI. This is relevant background as it means that there was no CIR constraint which might influence the construction of the words in dispute. This contrasts with the National Grid case in which the fiscal background was directly relevant to the interpretation of a phrase in the scheme. The tax regime did not allow an employer to be paid part of a surplus of scheme funds, which had already received tax exemptions when payments were made into the scheme. But the tax regime did not prohibit the release of a debt due by the employer to the scheme which had not had those tax advantages. This assisted the House of Lords to construe narrowly a provision in the scheme which prohibited the making of scheme moneys payable to the employers. In the present case, as Lewison LJ stated at [32] of his judgment, the draftsman of the scheme did not track the wording of the Revenue guidance in the Definition but chose different language. The scheme could have empowered the trustees to select an index as an alternative to the RPI. The question is whether it did so.

18 Finally, a focus on textual analysis in the context of the deed containing the scheme must not prevent the court from being alive to the possibility that the draftsman has made a mistake in the use of language or grammar which can be corrected by construction, as occurred in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101, where the court can clearly identify both the mistake and the nature of the correction.”

“29. As it seems to me, however, the approach indicated by, at least, Rainy Sky, Arnold v Britton, Wood v Capita, and Barnardo’s is clear. In construing a pension scheme deed, one starts with the language used and identifies its possible meaning or meanings by reference to the admissible context, adopting a unitary process to ascertain what a reasonable person with all the background knowledge reasonably available to the parties at the time would have understood the parties to have meant. If, however, the parties have used unambiguous language, the court must apply it (see Lord Clarke at [19] in Rainy Sky), and the context of a pension scheme deed is “inherently antipathetic to … [giving] some strained meaning to … the words used” (Lord Briggs at [22] in Safeway, approved by Barnardo’s at [15]).

………

33. Moreover, the process of corrective construction adopted, in the alternative, by the judge at [137] is only normally adopted where there really is an obvious mistake on the face of the document. There is no obvious mistake here as there was, for example, in Mannai as to the date or in Doe d Cox v Roe as to the name of the pub. The objective observer might well think that the power could have been more felicitously drafted, but that is not enough to allow the court to depart from the clear language, on the unequivocal authority of Rainy Sky and the later Supreme Court decisions I have cited. That is particularly so when the rules of a pension scheme are being interpreted.”

“But those cases have also made entirely clear that one cannot jettison the language used by the parties. As both my Lords have referred to, the consistent teaching of the Supreme Court is that one does not get into the question of choosing which interpretation is more consistent with business common sense unless there are two rival interpretations available: see Rainy Sky at [21]–[30] per Lord Clarke JSC, where the entire passage is about the consequences of a term being “open to more than one interpretation”, especially at [23] (“Where the parties have used unambiguous language, the court must apply it”); Arnold v Britton at [17]–[18] per Lord Neuberger PSC (“commercial common sense and surrounding circumstances … should not be involved to undervalue the importance of the language … [the court is not justified in] … searching for, let alone constructing, drafting infelicities in order to facilitate a departure from the natural meaning”), and at [77] per Lord Hodge JSC (“there must be a basis in the words used and the factual matrix for identifying a rival meaning”). These statements were all made in the context of construction of contractual provisions, but they apply at least as strongly to the construction of pension schemes where there are various factors which make the context “inherently antipathetic” to departing from the plain language of a provision (Safeway at [22] per Lord Briggs JSC), and which justify giving weight to textual analysis (Barnardo’s at [15]). It is true that Millett J said as long ago as 1987 in Courage Group’s Pension Schemes, Re [1987] 1 WLR 495 at 505 that the provisions of a pension scheme “should wherever possible be construed to give reasonable and practical effect to the scheme”, but the important words for present purposes are “wherever possible”.”

“The conclusions I draw from these authorities are that the rules of a pension scheme are a form of instrument in respect of which significant weight is to be given to textual analysis concentrating on the language that the drafter has chosen to use. As Lord Briggs stated in Safeway, the context is inherently antipathetic to giving a strained meaning to those words. That does not mean to say that literalism rules the day. A purposive construction may well be appropriate, particularly where it is required to give reasonable and practical effect to the scheme.”

(2) Archaeology

“In a case where the scope of a power of amendment and the validity of a particular amendment are in issue, examination of the history of the matter is plainly permissible and indeed indispensable. In other cases my instinct would be, like Rimer J, to stick to the current text as a general rule, while bearing in mind that the text of any long-established pension scheme is likely to be a patchwork. There is a serious policy issue here: it is often hard enough for trustees and their advisers (and even harder for members or pensioners who may not have easy access to advice) to interpret a pension scheme as it stands, without also having to delve into the archaeology of the scheme.”

“33. That passage was not directed to the situation which arises in the present appeal, where a clause in the original trust deed is adopted again when the deed is revised and replaced by a new trust deed, albeit one containing, to all and intents and purposes, the same clause and the question as to the meaning of the clause is one to be asked at the present time. Here clause 30 formed part of trust deed at all material times, but new trust deeds were adopted in substitution for the previous trust deed in 1985, 1994, 2001 and 2007. If an amendment is now proposed to deal with the current deficit, the question will be whether that amendment can now be carried out under that clause as it stands today.

34. I accept Mr Spink’s submission that, even though the very same clause is effectively re-adopted in the same form, its meaning may change on each re-introduction if the context in which it is re-adopted is materially different. Its meaning may be narrowed, or it may equally well have been widened, because of changes in the relevant background circumstances which fall to be taken into account in interpretation. Likewise I would also accept, as did the judge in paragraph 97 of his judgment, that it is possible that the meaning of a clause changes on re-adoption because there has been some material change in the scope or effect of some other clause in the period between its introduction and its re-introduction that has an impact on it. The case of Thellusson v Viscount Valentia [1907] 2 Ch 1, cited by the judge at paragraph 93 of his judgment, is an example of the narrowing of the meaning of a phrase as a result of a subsequent change in other wording of a document. The question for this court in that case was whether the rules of the Hurlingham Club could be altered so as to remove pigeon-shooting as one of its main objects. When the Club was set up, its sole purpose was ‘providing a ground for pigeon-shooting’ but subsequently words were added to extend the purpose of the Club to other sports, such as polo. Although the power of amendment could not be used to change the purposes of the Club fundamentally, the provision of a ground for pigeon-shooting was no longer the sole purpose of the Club. The report is a very short one and there is no explanation as to what changes had taken place in the Club’s activities. If there had been evidence that they had changed before the amendment to the purpose of the Club, that evidence would have been admissible on the interpretation of the words ‘providing a ground for pigeon-shooting’ because that phrase, following the amendment to include sports such as polo, fell to be interpreted in a new context. The more likely inference, however, from the re-adoption of a clause without any material change is that the clause retained its meaning without any material change.

35. Thus the meaning of a clause which is re-adopted from time to time has additionally to be considered in the context of circumstances subsequent to the date of its original adoption. It follows that regard should be had both to relevant circumstances at the date of its original adoption and to relevant circumstances at each subsequent re-adoption. Those circumstances can then be weighed in the balance to assess the impact of all the relevant circumstances on the interpretation exercise in hand. In this case, the most recent re-introduction of clause 30 was in 2007. However, where, as here, it is said that the meaning has changed as a result of some event occurring prior to its introduction or re-introduction, and it is common ground that nothing material had happened since, it may be convenient to take the circumstances at the time of the execution of that deed. So, in this case, the parties have taken the date of the adoption of the changes to the trust deed and rules in 2001 as the date at which the meaning of clause 30 should be ascertained, even though any further amendment would have to be within the scope of clause 30 at the time that it is sought to effect an amendment in reliance on this clause.”

(3) Headings

“I should add that Mr De Garr Robinson sought comfort from the heading to clause 2 (“Conditionality”). I do not consider that it helps. First, in very general terms that clause is about conditionality, but that general proposition does not help to decide the importance that the parties placed on any particular part of clause 2. For example, clause 2.2 required Gregory to insure the development once the Acquisition Condition had been satisfied. But it was not (and in my judgment could not have been) suggested that a failure to insure would have meant that the remainder of the agreement for lease was incapable of coming into effect. Second, despite the heading, all the provisions of clause 2 are immediately binding. Third, clause 1.1.8 says in terms that the headings are not to affect the interpretation of the agreement. The cases are divided on the question whether in these circumstances a heading should be taken into account (SBJ Stephenson Ltd v Mandy [2000] FSR 286, 297 and Doughty Hanson & Co Ltd v Roe [2009] BCC 126 § 71 say “Yes”, while Orleans Investments Pty Ltd v MindShare Communications Ltd [2009] NSWCA 40 § 68 says “No”). Where, as here, the contract says in terms that headings “shall not affect the interpretation” it seems to me that respect for party autonomy means that the headings cannot be allowed to alter what would otherwise have been the interpretation of the clause in question.”

“Mr Grant appearing for Mr Scragg referred me to an extract from Lewison, The Interpretation of Contracts 6th ed & supp (2017), para 5.13 which states that where the contract states expressly that the headings are not to affect its interpretation the cases are divided as to whether they can be used as an aid by the court. The two cases cited there where the court did take account of headings despite a contractual provision stating that they were for convenience only, SBJ Stephenson Ltd v Mandy [2000] FSR 286 and Doughty Hanson & Co Ltd v Roe [2009] BCC 126, do not, in my view, assist Mr Scragg. In the former case, the heading of a post-termination non-disclosure clause in an employment contract referred to “Confidential information” but the wording of the clause imposed a prohibition on disclosure simply of information, without the qualifying adjective that it protected only confidential information. A challenge to the width of the clause on the grounds that it purported to restrict disclosure of all information was rejected on the grounds that convenience included telling the reader at a glance what the clause is all about. Mann J in the latter case referred to the heading being convenient because it is descriptive of what the clause is about. In the present case Mr Scragg is trying to rely on the sub-heading for much more than an indication of what rule 15.1.3 is generally about, namely the trustee company’s stage of the application.”

(4) Other Authorities

(1) Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank PLC [2019] Pens LR 5 (“Lloyds 1”) (in which Mr Rowley appeared for the Employers and Mr Short appeared for the Representative Beneficiaries);

(2) Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank PLC [2021] Pens LR 10 (“Lloyds 3”) (in which Mr Rowley again appeared for the Employers and Mr Short again appeared for the Representative Beneficiaries); and

(3) Punter Southall Governance Services Ltd v Hazlett [2022] Pens LR 1 (“Axminster”) (in which Mr Short appeared for the representative Defendant).

“As Mr Spink said, all these cases turn on the construction of the particular terms used in the scheme in question and, save insofar as they lay down general principles, no direct assistance can be obtained from them. Indeed, there is very longstanding authority that on questions of construction reference to other decisions on different words in other instruments is a practice to be deplored: see the classic statement of Sir George Jessel MR in Apsden v Seddon (1874-75) LR 10 Ch. App. 394 at 397:

“No Judge objects more than I do to referring to authorities merely for the purpose of ascertaining the construction of a document. That is to say, I think it is the duty of a Judge to ascertain the construction of the instrument before him and not to refer to the construction put by another Judge upon an instrument perhaps similar but not the same.”

Mr Spink’s written submissions included a selection of indexation provisions found in the reported cases and in other Atos schemes. Such provisions often have a family resemblance consisting of a reference to the index to be used followed by circumstances in which some other index can be substituted (what can be called a trigger provision), but the detailed drafting shows a wide variety, and I entirely accept that this case has to be determined on the wording of the provision in question and not by comparing other cases in which other words have been construed. I was therefore, quite rightly, not taken to those other cases, although some of them are very familiar.”

VI. Rule 5.11

(1) General Approach

“Notwithstanding Schedule II if a benefit or instalment of benefits is not claimed by or on behalf of the person entitled to the benefit or instalment in accordance with these Rules within 6 years of its date of payment it shall be retained by the Trustees for the purposes of the Scheme”

(2) The Trustee’s Submissions

“175. I do not accept Mr Legge's submission that clause 25 operates as a forfeiture clause or a time-bar clause. The clause does not contain any wording which directly deals with the forfeiture of an entitlement to be paid arrears of benefits. Similarly, the clause does not contain any wording which operates as a time-bar on claims for payment of arrears of benefit. It is likely that the clause was intended to deal with orphaned money which ought to have been paid, but which could not be paid, to a missing beneficiary. In such a case, the Trustee would have surplus funds which it might wish to apply for a useful purpose rather than simply retain them indefinitely. It may be that the draftsman of the clause assumed, rightly or wrongly, that after six years from a payment accruing due, a claim to arrears would be statute barred and the clause was drafted on that basis. In any event, clause 25 does not in terms provide for a forfeiture or a time-bar. The absence of wording providing for forfeiture is particularly striking in view of the references to forfeiture in clause 23. It is difficult to think that the draftsman of clause 25 thought that he was providing for forfeiture of unclaimed payments but did not need to say expressly that was what he wanted to achieve.

176. If clause 25 were to be construed so that it dealt only with sums due to missing beneficiaries, then the case for reading in words of forfeiture or a time-bar would be stronger. However, Mr Legge submits that clause 25 also deals with cases where the Plan has been administered on the wrong basis and members have been underpaid for a considerable period of time. Mr Legge makes that submission because he wishes to rely on clause 25 in this case which is not a case of missing beneficiaries. In a case where the Plan has been administered on the wrong basis and arrears have built up, I am certainly not persuaded that words should be read into clause 25 to give the Trustee a power to forfeit the arrears of pension due more than six years earlier or to allow the Trustee to rely on a time-bar to claims for such arrears. There is considerable force in Mr Short's submissions that where the Plan has been administered on the wrong basis for a considerable period of time, the Plan will not have been funded on a different basis which has generated a fund to be applied pursuant to clause 25. The likelihood will be that there will be no such fund. The construction contended for by Mr Legge would involve changing a clause dealing with the application of a fund to a clause which does not deal with the application of a fund but which instead provides for forfeiture of, or a time-bar in relation to, the rights of the beneficiaries.

177. I conclude that clause 25 does not permit the Trustee to take steps to apply monies to one of the purposes specified in the clause and then to say that beneficiaries have thereby lost their rights to be paid arrears of payment which accrued due more than six years earlier.”

(3) The Employer’s Submissions

“But I should say at this stage, it may be the fault is entirely ours: we remain in a state of genuine uncertainty as to the precise nature of my learned friend's submission in relation to rule 5.11 of the amended 2000 rules, and all of its predecessors. He says that it applies to missing beneficiaries. You can see that from paragraph 44 of his skeleton. But, my Lord, in my respectful submission, that statement begs the question. It begs the question: how does rule 5.11 apply to missing beneficiaries? Does it apply to forfeit their benefits? Or does it leave those benefits untouched? And if it does, then what does -- what function does rule 5.11 serve? Because what my learned friend has been doing is to search for an analysis which gives rule 5.11 content, but not the content for which we contend, which, we submit, is borne out by the natural reading of the language used. But the question is what exactly happens to the benefits of this missing beneficiary? I have said, are they forfeited? Or do they remain an obligation of the scheme? And our understanding, or our analysis, is the inexorable logic of the arguments that have been presented on behalf of the trustee is that the missing beneficiaries' benefits are not forfeited, because otherwise there would have been no point in my learned friend going painstakingly through the scheme documentation to show your Lordship: well, forfeit appears in this rule, but not in rule 5.11.”

“Any money not claimed under the provisions of the Plan within six years of it becoming payable shall then cease to be claimable and shall revert to the fund.”

"62.9 Failure to claim benefit

No beneficiary shall be entitled to claim any instalment of pension or other benefit to which he is entitled under the Scheme more than 6 years after that instalment has fallen due for payment."

"9.5 Forfeiture of unclaimed benefits

Any sum which may have become due to a Member or other person entitled to benefit under the Rules shall be forfeited if it has not been claimed during a period of at least six years from the date upon which that sum became due, but, if the sum formed one payment of a pension or annuity the right to such pension or annuity shall not thereby be extinguished."

"24 Unclaimed benefits

24.1 If any pension or benefit or any instalment remains unpaid to and unclaimed by the person to whom it is payable for a period of six years from the date it became payable, then the entitlement to it shall be extinguished and it shall be retained by the Trustees in the Fund.

24.2 Any unclaimed AVC Interest shall be held by the Trustees on trust for the AVC Member or his estate as the case may be." (Footnote: ³)

“Before dealing with these rules individually, I will refer to the submissions made by the RBs as to the operation of these rules. The RBs submitted that the various rules all dealt with circumstances where no pension had been claimed and the rules did not apply to a case where a pension had been claimed and paid but the full amount of the pensioner’s entitlement was not paid to him. The RBs also submitted that the rules provided for the trustees to have a discretion as to what to do in a case which came within the relevant rule.

408. I will now consider the correct construction of these five rules. Rule 1 is not confined to a case where the pension has not been claimed and nothing has been paid. Rule 1 specifically refers to any instalment of pension. Accordingly, Rule 1 applies in a case like the present where the trustees have made payments in relation to pension entitlement but have underpaid the beneficiary. In such a case, Rule 1 provides that the beneficiary is not entitled to claim the amount of the arrears more than six years after those arrears accrued and ought to have been paid. As the beneficiary is not entitled to claim those arrears, the trustees are not bound to pay the beneficiary those arrears and any payment of those arrears would be a voluntary payment by the trustees. I was not specifically addressed on whether other rules of this Scheme allow the trustees to make ex gratia payments but Rule 1 does not allow an ex gratia payment in a case which comes within Rule 1.

409. Rule 2 is not confined to a case where the pension has not been claimed and nothing has been paid. Rule 2 refers to "any sum which may have become due" and also refers to a case where the sum formed "one payment of a pension or annuity". Accordingly, Rule 2 applies in a case like the present where the trustees have made payments in relation to pension entitlement but have underpaid the beneficiary. In such a case, Rule 2 provides that the unpaid sum shall be forfeited if it is not claimed within six years after it accrued and ought to have been paid. As the unpaid sum is forfeited in such a case, the beneficiary is not entitled to claim that sum, the trustees are not bound to pay the beneficiary that sum and any payment of that sum would be a voluntary payment by the trustees. I was not specifically addressed on whether other rules of this Scheme allow the trustees to make ex gratia payments but Rule 2 does not allow an ex gratia payment in a case which comes within Rule 2.

410. Although the language of Rule 3 is different from that of Rules 1 and 2, it operates in the same way as those rules.”

(4) Determination

A. The Rule

(1) Rule 5.11 makes no distinction between benefits unclaimed for six years because the beneficiary is missing and benefits which are unclaimed because the beneficiary is unaware of the entitlement (whether as a result of a mistake by the Trustee or otherwise). If the purpose of the rule was to draw such a distinction, one would have expected the drafter to use clear language to that effect. As Mr Rowley pointed out, there are limitation rules which depend expressly on the knowledge of the claimant: see, for example, section 14A of the Limitation Act 1980.

(2) By contrast, I am not satisfied that the Employer’s construction makes it necessary to supply any additional words at the end of the clause. If the effect of the clause is to extinguish a benefit or instalment after six years, then the “purposes of the Scheme” cannot as a matter of logic include the payment of that benefit or instalment (which has ex hypothesi been extinguished). In my judgment, this is the natural and ordinary meaning of the words.

(3) Moreover, Schedule II paragraph 6 provides clear support for this construction. As Mr Rowley pointed out, section 21(2) of the Pension Schemes Act 1993 and Regulation 61 of the Occupational Pension Schemes (Contracting-out) Regulations 1996 were permissive. Although they limited the circumstances in which an employer could forfeit a member’s GMP, they did not require an employer to include such a provision. The drafter of the 2000 Rules and the 2004 Rules chose to include such a provision but that provision was not paragraph 6. It was Rule 5.11.

(4) Paragraph 6 did not provide for forfeiture itself. Its purpose was to limit the circumstances in which forfeiture or suspension of a GMP was permissible. In particular, it provided that if a member had a GMP and it “is to be forfeited or payment thereof suspended in accordance with the rules” it should be forfeited or suspended in accordance with Regulation 61. In this context, the words “Notwithstanding Schedule II” at the beginning of the Rule 5.11 make perfect sense. The drafter made it clear that despite the limitation in paragraph 6, Rule 5.11 was intended to have general effect in relation to other benefits and instalments.

(5) If the Trustee’s argument is correct, then the drafter should have used the words “Subject to Schedule II” at the beginning of Rule 5.11 and not the words which he or she did use. But in my judgment, the drafter was careful to use the right language. But more to the point, it is difficult to see why it would have been necessary to include paragraph 6 in Schedule II at all if Rule 5.11 was not intended to be a forfeiture clause.

(1) If the Trustee’s argument is correct, then the words “for the purposes of the Scheme” must include not only the general purposes of the Scheme (such as augmenting benefits or paying administration costs) but also the specific purpose of paying benefits or instalments which have been unclaimed for more than six years since the date of payment. The rule must, therefore, confer a discretion on the Trustee to pay that benefit or instalment.

(2) I accept that it is possible for the rule to have this effect and Morgan J construed clause 25 in Axminster in a similar way. Moreover, this would provide a partial answer to the question posed by Mr Rowley (above). The effect of the rule would be to give the Trustee a discretion to pay the benefit or instalment more than six years after it fell due where there had been an absolute entitlement before.

(3) However, I am not satisfied that this is a satisfactory answer to those questions or that the rule was intended to operate in this way. If the clause confers a discretion upon the Trustee to pay unclaimed benefits where it has made a mistake and the beneficiary is unaware of the entitlement, the Trustee must be entitled to exercise that discretion in all deserving cases. As Mr Rowley pointed out, there are many other reasons why a benefit may not be claimed apart from the beneficiary going missing.

(4) Moreover, if the Trustee’s construction is correct, it is difficult to see what protection Rule 5.11 was intended to provide for the Trustee or what practical benefit it was intended to serve. The effect of the rule would not be to free up “orphaned” benefits because the Trustee would never know whether the beneficiary was missing or aware of the entitlement. In my judgment, it is far more likely that Rule 5.11 was intended to bar stale claims by extinguishing the beneficiary’s entitlement to the benefit or instalment if it had not been claimed more than six years after it fell due.

B. Archaeology

C. Heading

D. Other Authorities

VII. The Specific Issues

(1) Rule 5.11

1. In the absence of a valid claim for the purposes of Rule 5.11, does that Rule extinguish the entitlement of any member to be paid any shortfall in the lump sum paid resulting from the Equalisation Issue once six years has passed from the date on which the lump sum was paid?

E. Background

“Payment of Your Pension

Your pension is payable for life by quarterly instalments in advance direct to your bank or building society account. It will be paid on or around the first of each January, April, July and October and will be taxed as earned income under the PAYE system.

Tax Free Lump Sum

The tax free lump sum quoted under Option 2 is the amount that you may take in accordance with the scheme governing documents. You may, however, if you wish, choose to receive any amount of tax free cash up to this figure.

…….

In preparing this statement, care has been taken to reflect the most accurate and up to date information available at the time of preparation. The final benefits payable will always be subject to the Trust Deed and Rules of the pension arrangement, any discretion exercisable by the Trustees, all prevailing legislation, up to date earnings information and, where relevant, any restrictions necessary to comply with the State pension requirements (such as the amount of tax free cash sum).”

F. The Issue

G. Benefit

“Rule 36 refers to a failure to claim a benefit within six years of its becoming due. The period of time which is relevant for r.36 begins with the date on which a benefit becomes due. The reference to “a benefit” is to the sum which is payable on a certain date, whether it is a lump sum or more usually an instalment of pension. The reference to “a benefit” is not to the right to a pension from retirement (or some other date) during the lifetime of the pensioner. If an instalment was due on a certain date and part of the instalment was paid but part was not, the benefit which is relevant for r.36 is the part that was not paid. Rule 36 refers to the Trustee applying “all or any part of such benefit”. “Such benefit” must be the part that it is not paid as it cannot include the part of the instalment which is paid.”

H. Implied Term

“It is enough to reiterate that the process of implying a term into the contract must not become the re-writing of the contract in a way which the court believes to be reasonable, or which the court prefers to the agreement which the parties have negotiated. A term is to be implied only if it is necessary to make the contract work, and this it may be if (i) it is so obvious that it goes without saying (and the parties, although they did not, ex hypothesi, apply their minds to the point, would have rounded on the notional officious bystander to say, and with one voice, ‘Oh, of course’) and/or (ii) it is necessary to give the contract business efficacy. Usually the outcome of either approach will be the same. The concept of necessity must not be watered down. Necessity is not established by showing that the contract would be improved by the addition. The fairness or equity of a suggested implied term is an essential but not a sufficient pre-condition for inclusion. And if there is an express term in the contract which is inconsistent with the proposed implied term, the latter cannot, by definition, meet these tests, since the parties have demonstrated that it is not their agreement.”

“Here the express terms of the contract of employment confer a valuable right on the employee which is, however, contingent upon his taking certain action. Where that situation is known to the employer but not to the employee, will the law imply a contractual obligation on the employer to take reasonable steps to bring the existence of the contingent right to the notice of the employee? It is true that such an implication may have the consequence of sustaining a claim for purely economic loss. But this consideration would not furnish the essential reason for making the implication. If there is a basis for making the implication, it must lie rather in the consideration that the availability of the contingent right was intended by those who drew up the terms of the contract for the benefit of the employee; but if the existence of the contingent right never comes to his attention, he cannot profit by it and it might, so far as he is concerned, just as well not exist.”

“11. I recognise that a quite different situation might arise where the pension rights available to an employee in connection with his employment were not part of the terms of his contract of employment but arose out of a separate contract between the employee and an insurance company or the trustees of a pension fund. But that is not this case. Here there is no doubt whatever that the terms of the superannuation scheme as laid down in the regulations in force from time to time were embodied in the terms of the contract of employment of each plaintiff. Since the relevant Board was in each case the employer upon whom, although acting as agent for the Department, all liabilities were imposed by paragraph 2 of Schedule 1 to the Order of 1972, it seems to me beyond question that the legal obligation, if there was one, to notify the plaintiffs of their rights in relation to the purchase of added years rested in each case on the Board, not on the Department.

12. Will the law then imply a term in the contract of employment imposing such an obligation on the employer? The implication cannot, of course, be justified as necessary to give business efficacy to the contract of employment as a whole. I think there is force in the submission that, since the employee's entitlement to enhance his pension rights by the purchase of added years is of no effect unless he is aware of it and since he cannot be expected to become aware of it unless it is drawn to his attention, it is necessary to imply an obligation on the employer to bring it to his attention to render efficacious the very benefit which the contractual right to purchase added years was intended to confer. But this may be stretching the doctrine of implication for the sake of business efficacy beyond its proper reach. A clear distinction is drawn in the speeches of Viscount Simonds in Lister v Romford Ice and Cold Storage Co Ltd and Lord Wilberforce in Liverpool City Council v Irwin [1977] AC 239 between the search for an implied term necessary to give business efficacy to a particular contract and the search, based on wider considerations, for a term which the law will imply as a necessary incident of a definable category of contractual relationship. If any implication is appropriate here, it is, I think, of this latter type. Carswell J accepted the submission that any formulation of an implied term of this kind which would be effective to sustain the plaintiffs' claims in this case must necessarily be too wide in its ambit to be acceptable as of general application. I believe however that this difficulty is surmounted if the category of contractual relationship in which the implication will arise is defined with sufficient precision. I would define it as the relationship of employer and employee where the following circumstances obtain: (1) the terms of the contract of employment have not been negotiated with the individual employee but result from negotiation with a representative body or are otherwise incorporated by reference; (2) a particular term of the contract makes available to the employee a valuable right contingent upon action being taken by him to avail himself of its benefit; (3) the employee cannot, in all the circumstances, reasonably be expected to be aware of the term unless it is drawn to his attention. I fully appreciate that the criterion to justify an implication of this kind is necessity, not reasonableness. But I take the view that it is not merely reasonable, but necessary, in the circumstances postulated, to imply an obligation on the employer to take reasonable steps to bring the term of the contract in question to the employee's attention, so that he may be in a position to enjoy its benefit. Accordingly, I would hold that there was an implied term in each of the plaintiffs' contracts of employment of which the Boards were in each case in breach.”

“In considering this subject, I must begin by saying that I entirely concur with the position taken by the learned counsel for the suppliant, that although a contract may appear on the face of it to bind and be obligatory only upon one party, yet there are occasions on which you must imply—although the contract may be silent—corresponding and correlative obligations on the part of the other party in whose favour alone the contract may appear to be drawn up. Where the act to be done by the party binding himself can only be done upon something of a corresponding character being done by the opposite party, you would there imply a corresponding obligation to do the things necessary for the completion of the contract.”

“[N]o absolute rule that, if there is an express term covering a particular subject, that necessarily excludes the possibility of any implied term where there is no linguistic inconsistency. Rather, the correct approach, reflecting common sense, is that the existence of such an express term makes the co-existence of a further implied term on the same subject unlikely and especially so in a lengthy and carefully drafted document on which legal professionals have been advising.”

2. Where any shortfall in the lump sum was, alternatively would be, liable to be extinguished, is the member to be treated as having elected to commute the corresponding part of his or her periodic pension, or should the member’s periodic pension be increased to reflect the non-payment of the shortfall in the lump sum, or should some other approach be taken? 

3. In the absence of a valid claim as aforesaid, does Rule 5.11 extinguish the entitlement of any member to be paid any shortfall in any periodic payment of pension resulting from the Equalisation issue once six years had passed from the date of each periodic payment of pension?

4. Do the answers to paragraphs 1-3 above apply equally to shortfalls arising from the Accrual Rate issues or do different (and if so, what) answers apply?

5. When has a benefit or instalment been “claimed” for the purposes of Rule 5.11?

I. The Trustee’s Submissions

(i) How is a claim made?

(ii) What is claimed?

J. The Employer’s Submissions

“188. To be a “claim” for the purpose of r.36, the claim must be within the period of six years from the due date of payment. A claim which is before the due date will not suffice unless it could be treated as a continuing claim which, because it continues into the six-year period, is treated as having been made within the six-year period. The choice which the member makes on retirement between an annual pension with no lump sum and a reduced annual pension with a lump sum is not a claim to a benefit for the purposes of r.36. Similarly, a discussion between the Trustee and the beneficiary at the time when the pension comes into payment as to the practical arrangements for transferring payments to the beneficiary is not a claim to a benefit for the purposes of r.36. Further, such a claim would be before the due date for payment of the benefit that went unpaid and would not qualify as a claim for r.36, unless the claim could be considered to be a continuing claim.”

“190. Accordingly, I interpret “a benefit” for the purposes of r.36 as being the sum which is unpaid on the date on which it fell due. A “claim” must be a claim by the beneficiary to be paid the sum which has not been paid. The claim must come after the time when the sum was due and was not paid unless it was made earlier and is a continuing claim. The word “fails” means simply that a claim was not made and does not require the Trustee to show that the beneficiary was at fault in some way, or that the Trustee was free from fault in all ways. Mr Short’s submissions on the specific circumstances of this case where the Trustee did not administer the Plan correctly and the beneficiaries could not be expected to be aware that they were underpaid does not cause me to change my view as to the meaning of r.36 or as to the meaning of “fails” but those circumstances will be a relevant consideration when the Trustee comes to exercise its discretion as to how to apply the sums in question and, in particular, whether all or any part of such sums should be paid to the beneficiaries notwithstanding the forfeiture.”

L. Determination

(i) How is the claim made?

“I think that the primary meaning of the word “claim” — whether used in a popular sense or in a strict legal sense — is such as to attach it to the object that is claimed; and is not the same thing as the cause of action by which the claim may be supported or as the grounds on which it may be based. In the Oxford Dictionary “claim” is defined as: first, “A demand for something as due; an assertion of a right to something”; secondly, “Right of claiming; right or title (to something or to have, be, or do something; also on, upon the person, etc., that the thing is claimed from).” All the examples given under these two heads are examples of claims made to an object or upon a person. Under the verb “to claim” it is observed that it is “often loosely used, especially in the United States for: contend, maintain, assert.” I do not doubt that the word is frequently used in this looser meaning of “contention” or that it is often used by lawyers as if it meant the same thing as a cause of action. It is quite natural to speak of a claim in fraud or a claim in negligence, and Mr. Paull has advanced many powerful arguments to show that it is as “cause of action” that the word is used in this policy.”

(ii) What is claimed?

6. For these purposes, does a member make a claim by completing and returning a “Retirement Option Form”?

(2) Interest

7. Should the claimant apply interest and, if so, for what period and at what rate in relation to adjustments made (or to be made in the light of the answers to the above)?

8. On the proper construction and application of Rule 5.11 (which, for the avoidance of doubt, includes taking into account any implied limitation upon the application of that rule) is the answer to any of the questions raised above different if time elapsed between the claimant knowing that there was or may have been an underpayment and either (i) notifying the members; or (ii) arranging for the underpayment to be made good?

(3) Recoupment

9. If any person had been incorrectly paid sums after their entitlement to those sums had been extinguished by Rule 5.11 and the claimant seeks to recoup those sums from future payments of pension:

9.1 Does section 91(6) of the Pensions Act 1995 mean that the claimant must obtain an order from a competent court before effecting such recoupment in the event that there is a dispute as to the amount to be recouped in total or from each periodic payment?

“(6) Where a charge, lien or set-off is exercisable by virtue of subsection (5)(d) (e) or (f) —

(a) its amount must not exceed the amount of the monetary obligation in question, or (if less) the value (determined in the prescribed manner) of the person in question's entitlement or accrued right, and

(b) the person in question must be given a certificate showing the amount of the charge, lien or set-off and its effect on his benefits under the scheme,

and where there is a dispute as to its amount, the charge, lien or set-off must not be exercised unless the obligation in question has become enforceable under an order of a competent court or in consequence of an award of an arbitrator or, in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.”

9.2. Where section 91(6) requires the claimant to obtain such an order: (a) Is it necessary to obtain an order requiring the person to repay the overpayment in question? Or (b) Is it sufficient to obtain a declaration that there has been an overpayment to a particular extent; or (c) Is some other, and if so what, order required?

9.3 For these purposes is the Office of the Pensions Ombudsman a competent court?

“166. It is also common ground that, if trustees identify an overpayment and notify it to the member with proposals for the exercise of the right of recoupment out of future payments of pension, the member can refer to the Ombudsman a dispute about either the amount or the terms on which the trustees propose to exercise their right of recoupment. The outcome of such a referral could be a decision by the Ombudsman that the trustees are entitled to exercise their right of recoupment in the way they have proposed up to an amount which the Ombudsman is satisfied has been overpaid. If the Ombudsman made such a determination and the member was unwilling to accept the consequent exercise of the right of recoupment, the trustees could apply to the County Court to enforce the determination “as if it were a judgment or order of that court”: see the Pensions Schemes Act 1993, s.151(5)(a). This could be done by the County Court making an order declaring the trustees’ entitlement to recoup the overpayment in accordance with the determination.

167. BIC UK contends that the Pensions Ombudsman’s determination would amount to an order of a competent court, whereas the claimants dispute this.

168. In my judgment, a determination by the Pensions Ombudsman would not itself constitute “an order of a competent court”, because the Ombudsman is not a court. An order by the County Court pursuant to s.150(5)(a) of the Pensions Schemes Act 1993 would constitute an order of a competent court, however.”

“58. In looking for the ratio decidendi of a case, the starting point is always the rulings and reasons given in the judgment(s) to justify the court’s decision, read in the light of the facts of the case and the issues that arose. Generally, this is also where the inquiry ends. But where there is scope for argument that a rule or ruling stated in the precedent case was framed too broadly, or that the decision is for some other reason better explained on a different basis which would enable it to be distinguished, the search for the ratio will also involve an evaluation of the strength and persuasiveness of the reasons expressed in the judgment(s) or otherwise advanced or available for the ruling. Such an evaluation will require consideration of a wider legal context in order to assess whether and to what extent the reasoning and the result reached in the precedent case are consistent with other authorities and legal principles (including subsequent authorities and developments in the law).

59. Whether it is permissible for a later court to engage in such an assessment depends on a variety of factors. Without seeking to be exhaustive, relevant considerations include: (1) the degree of unanimity or consensus among the judges (assuming there was more than one) who decided the precedent case; (2) the clarity or otherwise of the ruling and of the supporting reasoning; (3) whether or to what extent the point on which the court ruled was in dispute and/or the subject of argument; (4) whether or how clearly the court evinced an intention to establish a binding rule; (5) whether and to what extent prior relevant authorities were considered by the court; (6) whether the court would, or sensibly could, have reached the same result if it had not ruled as it did; (7) whether the court’s ruling has been applied or approved in later cases; (8) whether the ruling or its underlying reasoning has been criticised by commentators or by judges in later cases; (9) whether the court considered or contemplated the factual situation that has arisen in the current case; and (10) the level in the court hierarchy of the court which decided the precedent case in comparison with the level of the court deciding the current case.”

(1) In Watson v Hemingway Design Ltd (above) Bean LJ stated that the question whether a tribunal is to be treated as a “court” for the purposes of a statute or rule depends on context: see [23]. The fact that the Divisional Court and the Court of Appeal may have found that an industrial tribunal or an employment tribunal should be treated as a court in other contexts, does not demonstrate that the decision in Burgess was wrong.

(2) The present context is the enforcement of a trustee’s rights which have been limited or circumscribed by statute. A trustee may not now enforce those rights where there is a dispute without “an order of a competent court”. I have held that in the case of the equitable right of recoupment section 91(6) extends to a declaration that the Trustee is entitled to exercise a self-help remedy. But the sub-section also extends to the enforcement of a charge or lien or other rights of set off. Moreover, the dispute may relate to the question whether the person entitled has been guilty of criminal, negligent or fraudulent conduct or a breach of trust (in the capacity of a trustee).

(3) The Pensions Ombudsman does have jurisdiction to decide any dispute of fact or law between the Trustee and an actual or potential beneficiary of the Scheme: see section 146(1)(c) of the Pension Schemes Act 1993. But as Mr Short pointed out, section 146(1A) expressly provides that the Ombudsman shall not investigate such a dispute unless it is referred by or on behalf of the actual or potential beneficiary. It has no power to investigate such a dispute at the request of the Trustee. It seems unlikely that Parliament would have extended the power of enforcement in section 91(6) to the Pensions Ombudsman if the Trustee itself had no right to apply for enforcement.

(4) As Arnold J pointed out in [168] the Pensions Schemes Act 1993 does not treat the Pensions Ombudsman as a court. Section 150(8) defines “the court” as the county court in England and Wales. Section 150 confers a number of analogous powers but it does not describe the Ombudsman as a court as such:

“(2) For the purposes of any such investigation the Pensions Ombudsman shall have the same powers as the court in respect of the attendance and examination of witnesses (including the administration of oaths and affirmations and the examination of witnesses abroad) and in respect of the production of documents.

(3) No person shall be compelled for the purposes of any such investigation to give any evidence or produce any document which he could not be compelled to give or produce in civil proceedings before the court.

(4) If any person without lawful excuse obstructs the Pensions Ombudsman in the performance of his functions or is guilty of any act or omission in relation to an investigation under this Part which, if that investigation were a proceeding in the court, would constitute contempt of court, the Pensions Ombudsman may certify the offence to the court.

(5) Where an offence is certified under subsection (4) the court may inquire into the matter and, after hearing any witnesses who may be produced against or on behalf of the person charged with the offence and hearing any statement that may be offered in defence, deal with him in any manner in which the court could deal with him if he had committed the like offence in relation to the court.”

(5) Section 151(5) also provides that any determination or direction of the Pensions Ombudsman shall be enforceable in England and Wales “in the county court as if it were a judgment or order of that court”. It follows, therefore, that the Pensions Ombudsman has no direct powers of enforcement and any application for committal for breach of a determination or direction or for other enforcement remedies or, indeed, under section 150(4) (above) must be brought in the County Court.

(6) Finally, Mr Short drew my attention to a number of authorities in which the Court has distinguished between the judicial functions of the Court and the wider powers of the investigation of the Pensions Ombudsman: see Miller v Stapleton [1996] Pens LR 67 (Carnwath J) and [1996] OPLR 281 (CA) and Westminster City Council v Haywood (No 2) [2000] Pens LR 235 (Lightman J). The drafter of section 91(6) would have had both these differences and the different enforcement regimes in mind and if Parliament had intended to extend section 91(6) to a determination by the Pensions Ombudsman, then the sub-section might have been expected to make express provision to that effect.

VIII. Disposal

1. In the absence of a valid claim for the purposes of Rule 5.11, does that Rule extinguish the entitlement of any member to be paid any shortfall in the lump sum paid resulting from the Equalisation Issue once six years has passed from the date on which the lump sum was paid?

2. Where any shortfall in the lump sum was, alternatively would be, liable to be extinguished, is the member to be treated as having elected to commute the corresponding part of his or her periodic pension, or should the member’s periodic pension be increased to reflect the non-payment of the shortfall in the lump sum, or should some other approach be taken? 

3. In the absence of a valid claim as aforesaid, does Rule 5.11 extinguish the entitlement of any member to be paid any shortfall in any periodic payment of pension resulting from the Equalisation issue once six years had passed from the date of each periodic payment of pension?

4. Do the answers to paragraphs 1-3 above apply equally to shortfalls arising from the Accrual Rate issues or do different (and if so, what) answers apply?

5. When has a benefit or instalment been “claimed” for the purposes of Rule 5.11?

6. For these purposes, does a member make a claim by completing and returning a “Retirement Option Form”?

7. Should the claimant apply interest and, if so, for what period and at what rate in relation to adjustments made (or to be made in the light of the answers to the above)?

8. On the proper construction and application of Rule 5.11 (which, for the avoidance of doubt, includes taking into account any implied limitation upon the application of that rule) is the answer to any of the questions raised above different if time elapsed between the claimant knowing that there was or may have been an underpayment and either (i) notifying the members; or (ii) arranging for the underpayment to be made good?

9. If any person had been incorrectly paid sums after their entitlement to those sums had been extinguished by Rule 5.11 and the claimant seeks to recoup those sums from future payments of pension:

9.1 Does section 91(6) of the Pensions Act 1995 mean that the claimant must obtain an order from a competent court before effecting such recoupment in the event that there is a dispute as to the amount to be recouped in total or from each periodic payment?

9.2. Where section 91(6) requires the claimant to obtain such an order: (a) Is it necessary to obtain an order requiring the person to repay the overpayment in question? Or (b) Is it sufficient to obtain a declaration that there has been an overpayment to a particular extent; or (c) Is some other, and if so what, order required?

9.3 For these purposes is the Office of the Pensions Ombudsman a competent court?