Pension Fund Underwriting - Trading?

The Court of Appeal has allowed the pension funds’ appeal in Trustees of British Telecom Pension Scheme & Others v Clark. It was persuaded that there were substantial grounds for the Special Commissioners’ conclusion (overturned by the High Court) that the funds’ sub-underwriting activities formed an integral part of their investment process and took their colour from that process. This being so, the Commissioners’ finding of fact could not be disturbed, and the underwriting income was covered by statutory exemption.

Delivering the leading judgement, Robert Walker LJ refused to attempt to lay down even tentative guidelines of general application to pension schemes, as the case turned on its particular facts. However, he made some helpful general comments about the criteria of trading.