No bounty
NO PRIZES for guessing that today's inflation is bad for today's and tomorrow's pensioners. Those who are getting worse off year by year will take a hungrier interest in the key question about pension funds: whose are they? Mr Justice Warner, I am glad to find, favours the pensioners. His significant ruling came in the case of Mettoy, the toy company which went bust in 1984 with a £9 million surplus in its pension fund. Should that £9 million go to Mettoy's creditors, or could it pay for discretionary benefits to pensioners, giving them more than their bare basic rights? He found for the pensioners in implying that their benefits were the fruits of their work, and a form of earnings. In his judgment (reported by Incomes Data Services) he explained: The beneficiaries under a pen- sion scheme are not volunteers. Their rights are derived from the contracts of employment of the members, as well as by the trust instrument. Those rights have been earned by the service of the members under those contracts, as well as by their contributions. It is not correct to say that the rights of beneficiaries under the scheme are satisfied when they receive their mandatory rights and that anything more lies in the bounty of the employer.' Good. I now hope that some pensioner whose income is being eaten away by inflation will arm himself with this ruling and put it to the test.
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