The trustees of the Bic UK Pension Scheme could be forced to recoup £5m from pensioners after a court decided that pension increases paid were not valid.
The stationary manufacturer scheme introduced pension increases in 1991 for pensions accrued before 1997, but these didn’t comply with the necessary formal requirements of the scheme rules at the time.
Amendments were then made to validate the increases in 1993 and these were then taken into account to calculate future pension entitlements.
But Bic, the company, argued the increases were not valid and took the trustees to court in 2011.
Now a lawyer has said the scheme could ask for the money back. It amounts to £5.06m and involves some 194 pensioners.
The reason is that this week the Court of Appeal overturned a previous decision from the High Court and concluded that the increases were not valid.
It found that the previous ruling, which had sided with the trustees, "was a step too far and involved the re-writing of history to an impermissible extent".
According to Stephen Scholefield, partner at law firm Pinsent Masons, the trustees of the scheme can look to recoup the increases from members, "for example by off-setting these against the pensions to be paid to them in future".
But he warned: "That isn’t straight forward, as the members may then bring their own complaints arguing that this is unfair, for example if they have spent the money in good faith and recouping would cause hardship."
Mr Scholefield said the case should send a message to other trustees.
He said: "Make sure you understand your rules before making decisions, so that you exercise your powers properly. And if in doubt take advice."
The Bic defined benefit scheme, which closed to future accrual in 2010, had assets of £34m against liabilities of £40m at the last triennial valuation conducted in 2015, excluding liabilities from the pre-1997 increases, which amount to £5.06m.
As of 2017, the scheme had 377 members, of whom 219 were pensioners and 158 were deferred members.
Some 194 pensioners have received pre-1997 increases, which were suspended in March 2013 .
maria.espadinha@ft.com
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