Second Court of Appeal Judgment in Safeway’s long running pensions equalisation case

On 13 July 2020 the Court of Appeal handed down its second judgment in Safeway Ltd v Newton (previously [2017] EWCA Civ 1482]) concerning the date on which the Normal Pension Ages applicable under the Safeway Pension Scheme were equalised at 65.

Safeway Limited v 1) Andrew Newton 2) SPTL [2020] EWCA Civ 869: equalisation pursuant to section 62 Pensions Act 1995

The Court of Appeal held that section 62 Pensions Act 1995 went further than Article 119 of the Treaty of Rome and was an effective measure to close the Barber window.

The Background

On 1 December 1991 it was announced to Scheme members that Normal Pension Ages (NPAs) would henceforth be 65 years for men and women. On 2 May 1996 a definitive deed sought to have retrospective effect to 1 December 1991.

In 2017 the Court of Appeal upheld the Order of Warren J at first instance that, as a matter of construction of the power of amendment, the 1991 announcement did not constitute a valid amendment of the Scheme. The Court of Appeal referred to the Court of Justice the question of whether, as a matter of European law, the 1996 Deed could have retrospective effective to remove rights which were validly defeasible under domestic law.

The Court of Justice held ([2020] Pens. L.R. 4) that, save for in exceptional circumstances (which were not contended to apply in the instant case), it was not permissible as a matter of European law retrospectively to level down the rights of members, regardless of whether the rights were defeasible under domestic law.

The Latest Judgment

The matter came back to the Court of Appeal to determine the sole remaining issue, namely whether the 1996 Deed had retrospective effect to 1 January 1996 only (the day on which section 62 of the Pensions Act 1995 came into force). The issue turned on whether section 62 was an effective “measure” to equalise NPAs at 60 from 1^st January 1996 (section 62 introduced an equal treatment rule into all pension schemes, from that date). It was common ground that, if section 62 was such a measure, the 1996 Deed was effective as a matter of domestic law so as to amend retrospectively.

The Court of Appeal has held that section 62 went further than Article 119 of the Treaty of Rome and was an effective measure to close the Barber window. The logic of the Court of Appeal’s judgment is that all pension schemes which had not hitherto validly equalised NPAs did so on 1 January 1996 by reason of section 62, with the consequence that all such schemes had an equalised NPA of 60 from that date. At that point Article 119 ceased to have any operation with regard to the equalisation of schemes.

Andrew Short QC and Michael Uberoi, instructed by Burges Salmon LLP, acted for Mr Newton (the Representative Beneficiary) while David E. Grant, instructed by Eversheds Sutherland (International) LLP, acted for the Trustee.

Find Out More

Andrew Short QC’s practice centres on pensions, employment, and general commercial work.

Andrew has acted in many of the leading cases relating to discrimination in pay and pensions, including Abdulla v Birmingham City Council, Brierley v Asda, McCloud v Lord Chancellor, and Sargeant v LFEPA. His pensions work encompasses both private and public sector schemes and includes issues of construction, funding issues, preservation and revaluation, Beckmann claims and various regulatory issues.

Andrew has been recommended for Pensions and for Employment in both Legal 500 and Chambers & Partners for many years.

David E Grant practises primarily in commercial law and particularly pensions and employment. He regularly appears in the Court of Appeal, High Court and specialist Tribunals. His clients have included many leading business including the Atos Group, British Airways, BT, ITV, the Royal Bank of Scotland, Lloyds Bank, Aegon and Transport for London. He has also acted for the Pensions Protection Fund, the Pensions Regulator and the Pensions Ombudsman as well as leading professional service companies such as Aon, Mercer and Barnett Waddingham as well as various high net worth individuals.

David has been recommended in Chambers and Partners and the Legal 500 since 2007 and is currently ranked as one of two Band 1 pensions juniors.

Michael Uberoi practises in commercial and chancery litigation, with a particular focus upon pensions and financial services. Recent significant pensions cases include Univar UK v Smith & Ors [2020] EWHC 1596 (Ch), Safeway v Newton [2020] Pens L.R. 4, and Sheffield v Kier Group plc [2019] EWHC 986 (Ch).

Michael is recommended as a Leading Pensions Junior and a Leading Financial Services Junior by Legal 500.

To find out more about this case and the barristers involved please contact Nick Levett (+44 (0)20 7427 4908) or Adam Macdonald (+44 (0)20 7427 4906) or call us on +44 (0)20 7353 6381 for a confidential discussion.

News 13 Jul, 2020