Sea Containers Case - Another Equalisation Problem Addressed

The recent judgment in the High Court case of In the Matter of Sea Containers Services Ltd (in Liquidation) and others [2012] EWHC 2547 (Ch) provides warning of how important it is to draft agreements outside of the trust deeds and rules very clearly, so that it is obvious how they interact with scheme benefits.

Sea Containers had a final salary occupational pension scheme, which they equalised by raising the female normal retirement age to 65, in line with the male normal retirement age. A "Special Promise letter" was provided to about 40 female employees stating that if the employee "...still elect[s] to retire at her previous retirement age of 60, the Company shall provide a pension at age 60 equivalent to that which would have been available prior to the Pension Scheme changes..."

A number of questions arose from this "Special Promise" including whether the member had to retire specifically on her sixtieth birthday or simply in her sixtieth year, what it means to "elect to retire", whether the promise could be enforced against Sea Containers'...