Prudential DB members take to High Court

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Members of Prudential's defined benefit scheme had their challenge over the legality of discretionary benefit increases to the High Court heard in the past few weeks.

The dispute surrounds a policy change made by the insurer to its DB scheme in 2005, which trustees were notified of in March 2006, that capped discretionary increases in line with RPI, limited to 2.5%. Disgruntled members claimed since the policy change, RPI has been a few percentage points higher than the capped 2.5%, so five years down the line benefits have fallen about 4% or 5% behind. Trustees wanted to clarify whether the company may award annual pension increases at its discretion, or whether members are entitled to increases by reference to RPI or any other rate. The scheme...

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