The Court of Appeal has ruled on two long-running disputes about the ability of an employer to change pension benefits for future service (for example by closing a scheme to future accrual and/or capping pensionable pay). The decisions provide greater clarity for employers and trustees considering similar proposals.
IBM: primacy of ‘reasonable expectations’ overturned -
The Court of Appeal’s decision in IBM v Dalgliesh overturns a significant previous High Court ruling that IBM had breached its Imperial duty (that is, the employer’s implied duty of good faith in exercising its powers under a pension scheme) and its contractual duty of trust and confidence towards its employees.
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