Benefit equalisation might just be about to take a much-needed haircut. In its recent decision in Safeway the Court of Appeal has opened up a new ‘Barber Window of opportunity’ by questioning the long-established principle that benefits cannot be levelled-down retrospectively in order to align male and female retirement ages.
The recent decision of the Court of Appeal in Safeway v Newton has thrown open the possibility that a principle to which the pensions industry has subscribed for many years – namely that equalisation cannot properly be achieved by retrospectively increasing retirement ages to members’ detriment – may not be as wide-ranging or categorical as has long been thought. The court is now, in order to resolve what it considers to be an uncertainty of EU law, referring to the Court of Justice of the European Communities the question of whether equalising in this way is actually unlawful. If the CJEU decides that in Safeway’s case these steps were in fact lawful, the outcome may then be relevant to those schemes which attempted to equalise retrospectively by “levelling down” members’ benefits (by raising retirement ages) but were subsequently advised, as was widely understood at the time, that this was impermissible as a matter of European law.
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© Herbert Smith Freehills 2020