IBM trustee success in rectification claim: active members entitled to an unreduced early retirement pension - .PDF file.
In a case brought by the trustee of the IBM Pension Plan (advised by Nabarro partners Jennifer Bell and Neal Gibson) the High Court has ruled that the scheme documents should be rectified to confirm that active members have a right to retire without employer consent from age 60 (where the normal retirement age is 63). The trustee argued that the documentation did not correctly reflect the intention of the parties and so a rectification order should be given. The judge (Mr Justice Warren) also made some important findings about the effect of preservation legislation and the relationship between an employee’s contractual terms and the provisions of the pension scheme.
Some of the key findings include the following:
- The “compelling” evidence established that, at the time the initial deed was executed, both the trustee and IBM intended that active members should be entitled to retire as of right from age 60.
- A subsequent consolidating deed should also be rectified to allow active members to retire on an unreduced pension without consent from age 60.
- The rectification will not apply to deferred members. Although up until April 2005 “preservation” legislation meant that they should have been able to require an unreduced pension at 60, that legislation has been amended and cannot be relied on retrospectively…
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