DB Scheme : increases to the pensionable salary limited to a max. of 4% pa, legal?

[Omega]

I have two questions about Defined Benefit pension schemes.
Our company has a scheme whereby at normal retirement age (60),
One receives 2/3 of the final salary – after a min. 30 years service.
In 2004, because of under-funding, this was arbitrarily changed by the company and/or trustees whereby increases to the pensionable salary were limited to a max. of 4% per annum. Is this change legal – or do the scheme members have to agree to it? Secondly, if (for any reason) one later had a salary decrease, would the pensionable salary be decreased as well or is there anything in pensions legislation which prevents this from happening? Many Thanks.....

 

[Conan]

Re: DB Scheme : increases to the pensionable salary limited to a max. of 4% pa, lega

For a purely pension fund rules perspective, the Trustees are within their powers to make changes to the Plan in order to properly manage the structure. However I would have expected that they would have at least advised members of the change and the implications.
A seperate matter is the Industrial Relations aspects. Can the employer change your terms and conditions without consultation/agreement?