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Court of Appeal overturns Upper Tribunal pension decision

Pension

The Court of Appeal has allowed the Secretary of State’s appeal against a decision of the Upper Tribunal (“UT”), which concerned historical pension arrangements under which a “contracted-out” pension scheme is required to pay a guaranteed minimum pension (“GMP”) to a surviving spouse.

The UT decided that, where a woman had earned the maximum Category A pension in her own right, a deduction could not be made from that pension to reflect a GMP inherited on her husband’s death. Although the UT concluded that the operative provision in the Pension Schemes Act 1993 required a deduction to be made, it considered that this led to unfair outcomes and was overridden by a statutory purpose clause. The Court of Appeal allowed the Secretary of State’s appeal, deciding that the meaning of the relevant statutory provision was clear and could not be distorted in reliance on the purpose clause. The Court decided that this construction produced a coherent, workable and comprehensible scheme that delivered to members of contracted-out schemes and their widows the same overall benefits they would have received had the member’s employment not been contracted out.

Julia Smyth, led by Sir James Eadie KC, represented the Secretary of State.

To access the judgment, please visit the following link.

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