Pension scheme documentation—fetters on the power of amendment (3i Plc v Decesare)
Pensions analysis: The claimant, the principal employer under the 3i Pension Plan (the Plan), sought a declaration broadly to the effect that on the true construction of the Plan’s power of amendment the restriction on amendments affecting ‘accrued rights or interests’ did not prevent termination of the future accrual of benefits and the Plan had been validly closed to future accrual by a deed dated 22 February 2010. Concern as to the effectiveness of the deed had arisen in the light of the Court of Appeal’s decision in British Broadcasting Corporation v BBC Pension Trust that a restriction protecting members’ ‘interests’ protected the ability to continue to accrue future service benefits. The first defendant, the representative beneficiary, argued for a similar construction. After considering the correct approach to construction and relevant linguistic principles, the court granted the declaration sought. The case will be reassuring to many practitioners who have construed a similar phrase in a similar way and the reasoning offers useful guidance. Written by Elizabeth Ovey, barrister at Radcliffe Chambers.