The National Association of Pension Funds (NAPF) says yesterday's judgment by the House of Lords, to ...
Yesterday's decision was the final attempt by members and pensioners of the Electricity Supply Pension Scheme (ESPS) to claim the surplus funds - money which is over and above that needed to meet pensions benefit payments - and use them to boost pensions benefits for its members.
There are 25 pensions schemes under the National Grid umbrella, so losing the Lords appeal would have meant the schemes making massive payouts.
But after five years of legal wrangling, the House of Lords has now overturned a ruling by the Court of Appeal that the surplus belonged to the employees and members and backed the original ruling made by the Pensions Ombudsman.
The Lords has found in favour of National Grid, and the company has already confirmed it could use the surplus in the way it intended, to take an employer contributions holiday and boost future redundancy payouts.
"This pragmatic decision is good news for employers who want to provide salary related pension benefits and for those members who are on the receiving end of such promises", says Alan Pickering, NAPF Chairman.
The pensions industry is still said to be in disagreement, however, as to whether the ruling refers merely to this one scheme, or whether it sets the precedent for the industry's approach to all surplus pension funds.
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