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The Supreme Court has unanimously rejected an appeal by the employer against a decision that, on the terms of a pension scheme’s rules, trustees were not able to switch from RPI to CPI indexation while RPI remained a published index.

Lord Hodge’s judgment sets out, for the first time in a Supreme Court decision, guidance as to the principles applying to construction of pension scheme deeds and rules. Those principles emphasise the formal and long-term nature of such instruments, together with the fact that they are to be relied on and accessible to parties who were not involved in their drafting and who may not have knowledge of all the background to their negotiation.

Since the employer’s appeal failed, the Court did not need to consider the representative beneficiaries’ cross-appeal, which argued that any change (if permitted as a matter of construction) would be subject to the protective restrictions of section 67 of the Pensions Act 1995.

Fraser Campbell acted for the representative beneficiaries, who resisted the appeal (the trustees were neutral), led by Andrew Simmonds QC and instructed by Dentons (Elmer Doonan).

The full judgment can be found here.


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