Pre-97 uplifts: TPO picks lead case in Nissan dispute
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The Pensions Ombudsman plans to look at a ‘lead case’ to determine complaints by several members of the Nissan Pension Plan over a lack of discretionary increases on pre-1997 accrual between 2023 and 2025.
The ombudsman said that “a suitable case has been received by TPO and, on completion of the plan’s internal dispute resolution procedure (IDRP), TPO intends to investigate it as a ‘lead case’ due to the number of members potentially affected by the same issue”.
It noted that although all complaints should be submitted under the plan’s IDRP, “we understand that the trustees will not be providing a substantive response to those complaints until the lead complaint has completed IDRP and is determined by the Ombudsman or otherwise concluded”, to avoid undermining the current lead case.
A Nissan spokesperson said: “The Nissan Pension Plan is administered in full compliance with regulations by the trustees of the scheme. By nature, discretionary increases are not guaranteed and any decision that the trustees make on it must take into account all relevant factors.”
The spokesperson for the loss-making car manufacturer did not say if decisions on discretionary pre-97 uplifts require Nissan’s consent. Research by the Pensions Regulator from 2024 suggests that nearly three-quarters of schemes offering discretionary benefits need the employer to agree.
The Pensions Ombudsman recently highlighted two cases that were upheld because the trustees and an employer, respectively, had not properly considered the discretions at their disposal.
The lead case approach is one TPO has started taking where it receives multiple similar complaints about a scheme. It is still due to determine a lead case in the dispute between the Boots Pension Scheme and some of its pensioners, who claim the trustees should not have increased the normal retirement age before a buy-in was signed.
Where has paternalism gone?
Labour MP Luke Akehurst secured a debate in parliament about the issue in March this year, saying Nissan has not paid pre-97 increases for “a quarter of a century”, during which time the cost of goods has roughly doubled. According to Akehurst, the scheme has been in surplus since 2022 but no pre-97 increases have been paid. Nissan did not comment on these statements.
“The same has happened again every year since, which leads the pensioners to fear that there is a new policy by the trustees that no discretionary increases will ever again be handed to the retired Nissan workers holding these pensions,” he said.
The MP for North Durham suggested the trustees did not sufficiently consider factors like inflation and member contributions, adding: “For that reason, I believe that statutory intervention is urgently required.”
Since then, the Pension Schemes Act has received Royal Assent. Despite the debate, the act does not include any direct intervention in terms of pre-97 uplifts in private sector schemes. However, new surplus release rules are expected to require the consent of trustees, so that trustees could in theory negotiate improved member benefits in return for some surplus being released to the employer.
The issue remains a live one for as long as inflation is relatively high and companies reluctant to show generosity to some of their former workers. Of 200 DB schemes that allowed for discretionary benefits, only about one in three had provided these in the previous three years, TPR found. Where discretionary benefits had been provided, just 15% were for pre-97 accrual, despite many schemes running surpluses and low-risk investments.
During the parliamentary debate this year, Labour MP Matt Rodda said some international companies are paying inflationary increases in other jurisdictions where they operate but not in the UK: “There have been a number of instances of that in my area, where pensioners from Berkshire in schemes run by international companies have seen exactly that. For example, Irish pensioners or US pensioners get an increase, but not British pensioners.”
The government’s own arm’s length Pension Protection Fund does not currently pay pre-97 increases. However, the Pension Schemes Act 2026 gives it permission to start indexing this up to 2.5% from January 2027. Crucially, only members whose old schemes provided for mandatory, rather than discretionary, pre-97 uplifts will benefit.
