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Neutral Citation Number:	2008 33
Reported Number:
File Number:	CP 2611 2007
Appellant:	GW
Respondent:	Secretary of State for Work and Pensions
Judge/Commissioner:	Judge M. Rowland
Date Of Decision:	08/12/2008
Date Added:	17/12/2008
Main Category:	Retirement pensions
Main Subcategory:	additional pensions and SERPS
Secondary Category:
Secondary Subcategory:
Notes:	Court of Appeal decision reported as [2010] AACR 7 Retirement pension – additional pension – whether guaranteed minimum pension to be deducted from total additional pension or only from the additional pension attributable to contracted-out employment The claimant was a member of an occupational pension scheme that was contracted out from the State Earnings-Related Pension Scheme. On 31 March 1991 he ceased employment and drew his occupational pension. He was awarded his state retirement pension from 12 May 2002 when he became 65. His total weekly pension was calculated on the basis of a deduction of £40.66 from his pre-April 1997 additional pension entitlement in order to take account of the guaranteed minimum pension attributable to his membership of a contracted-out occupational pension scheme. On his appeal he argued that, if section 46 of the Pensions Schemes Act 1993 required his GMP to be set off against and deducted from his pre-April 1997 additional pension, the extent of the deduction should be limited to that part of the pre-April 1997 additional pension that was attributable to the years in which he was in contracted-out employment. The Upper Tribunal commented that it appeared anomalous that a guaranteed minimum pension derived from a contracted-out pension scheme should be offset against an additional pension derived from earnings factors attributable to contributions or earnings in employment that was not contracted-out but held that to be the effect of a literal construction of section 46 and that, in the absence of any evidence as to intention, the requirement set out in Inco Europe v First Choice Distribution [2000] 1 WLR 586 that a judge must be “abundantly sure” that a specific drafting error had been made before correcting an anomaly was not met. The Upper Tribunal therefore dismissed the appeal (GW v SSWP [2008] UKUT 33 (AAC)). The claimant appealed to the Court of Appeal. The Court of Appeal was provided with pre-statutory material relating to section 29 of the Social Security Pensions Act 1975, the predecessor of section 46. Held, dismissing the appeal, that: 1. the pre-statutory material gave no basis for contending that the absence of any restriction of the statutory set-off to additional pension accruing in the contracted-out period of employment was due to an error on the part of the draftsman and did not represent the intention of the legislature (paragraph 27); 2. there is no scope within the legislation for there to be a separation of periods in which a person was not contracted out of SERPS and for additional pension earned in those periods to be taken out of the operation of section 46 and paid without any deduction and if, because of differences in the ways in which the real values of GMP entitlements and of earnings factors were protected, that involves some eating into additional pension earned in contracted-in years, that simply had to be accepted as part of the structure of the scheme (CP/1318/2001 approved) (paragraph 27); 3. while the effect of amendments to the scheme in 1995 may have been substantially to increase the likelihood of a GMP increasing in value at a greater rate than a prospective additional pension, nothing in the historical material suggested that that was foreseen when either section 29 or section 46 came to be enacted or that Parliament intended to make any special provision to deal with the difficulty (paragraphs 28 and 29).
Decision(s) to Download:	CP 2611 2007-00.doc [2010] AACR 7 bv.doc