Industrial Court of New South Wales CITATION: Jennifer Jovic v SAS Trustee Corporation [2007] NSWIRComm 102 APPLICANT: Jennifer Jovic PARTIES: RESPONDENT: SAS Trustee Corporation FILE NUMBER(S): 2359 of 2006 CORAM: Marks J Superannuation appeal - claim by respondent for interest to be paid on accelerated payments to provide pension on retirement at age 55 - requirement for applicant to show election to contribute to age 55 - applicant's submissions based on equitable grounds - regard to totality of functions, duties and responsibilities of respondent as trustee - no evidence re applicant's election to contribute on the basis of retirement at age 55 - evidence re annual statements since 1991 - applicant contributed lump sum of additional contributions over relevant period - respondent established policy to deal with change in contributor status from retirement age 60 years to 55 years in 1998 CATCHWORDS: Held: Difficulty in proving what occurred many years ago - objective approach - entitlement to a pension payable upon retirement at age 55 is a financial advantage to the appellant - policy formulated by trustee is appropriate - appellant was accorded opportunity to gain entitlement to benefits of early retirement therefore fund should be revenue neutral - respondent acted in conformity with fiduciary and other obligations - appeal dismissed - no order as to costs LEGISLATION CITED: Superannuation Administration Act 1996 Superannuation Act 1916 McMurtrie v Commonwealth of Australia [2006] NSWCA 148 CASES CITED: Leckie v Crockett and ors (No 2) [2007] NSWIRComm 42 Jo Gedeon v First State Super Trustee Corporation [2005] NSWIRComm 62 HEARING DATES: 29 March 2007 DATE OF JUDGMENT: 18 May 2007 APPLICANT: Mr M Gibian of counsel SOLICITOR: Ms A McRobert W.G. McNally Jones Staff LEGAL REPRESENTATIVES: RESPONDENT: Mr T Ower of counsel SOLICITOR: Mr B Matthews SAS Trustee Corporation JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Marks J Friday 18 May 2007 Matter No IRC 2359 of 2006 Jennifer Jovic v SAS Trustee Group Application by Jennifer Jovic to appeal against the decision of the SAS Trustee Corporation given on 24.11.2005 JUDGMENT [2007] NSWIRComm 102 1 The applicant, Jennifer Jovic, appeals to this Court pursuant to s 88 of the Superannuation Administration Act 1996 against a decision of the respondent, SAS Trustee Corporation, to charge her interest on additional contributions made by her to the State Superannuation Scheme. The background to the appeal may be stated briefly. The applicant commenced employment in the New South Wales public service in 1981 and became a contributor to the State Superannuation Scheme. The notice of appeal is based on an assertion that the applicant made a positive election to contribute to that scheme on the basis that she would retire at age 55. However, she was required to contribute and did in fact contribute to the scheme as though her retirement age was 60. The notice of appeal states that she was unaware that the incorrect retirement age had been fixed by the scheme. This resulted in her making contributions at a lesser rate than would have applied if she were to retire at age 55. When she discovered the error, the scheme trustee required her to pay a lump sum being the total of all of the higher contributions that she would have had to pay so as to equate with a contribution rate applicable to retirement at age 55. No complaint is made about this. 2 However, the trustee required the applicant to pay an additional lump sum being the total of interest that the fund would have earned on the additional monies contributed by the applicant to put her in the same position as if she were to retire at age 55. It is the requirement to pay these additional "interest" monies that is the subject of the appeal. 3 When the appeal came on for hearing an agreed statement of facts was tendered into evidence, which I set out hereunder: 1. The Appellant was born on 6 December 1951. 2. The Appellant became a permanent employee of the N.S.W. public service on 14 December 1981 initially employed in the NSW Lotteries Office. The Appellant is currently employed in the Department of Lands as a Clerical and Administrative Officer, Grade 9/10. 3. The Appellant joined the State Super Scheme (SSS) on 23 September 1982 and remains a member of the scheme. The Respondent is the Trustee responsible for the SSS. 4. At the time of joining SSS, the appellant believes that she elected to retire on full benefits at age 55 (R55). It has always been and remains the Appellant's intention to retire at 55 years of age. 5. Contrary to the election believed to be made by the Appellant upon joining the SSS, her employee contributions to the scheme were deducted at the lesser rate applicable as if she had elected to retire on full benefits at age 60 (R60). 6. As a contributor for R60, the Appellant may retire on a lesser benefit at any time after attaining age 55 on 6 December 2006. The benefit payable would increase progressively with proximity of retirement to age 60. The full benefit would only be payable if the Appellant retires at or after 60 years of age. 7. On 1 July 1985 the SSS was closed to new members. 8. The Appellant made inquiries with the Respondent during 2004 as to her retirement status and was instructed to approach NSW Lotteries to obtain copies of her employment records. Employment records relating to the period in which the Appellant commenced employment are no longer retained by NSW Lotteries or the Respondent. 9. On 3 March 2005 the Appellant applied to the Respondent to change her contribution status in the SSS from R60 to R55. The Appellant subsequently provided a statutory declaration concerning her intention to retire at 55 years of age. 10. The Respondent agreed to change the Appellant's contributions status from R60 to R55 on condition that the Appellant pay to SSS the difference between the amounts already contributed by her to the SSS and the R55 rates plus interest on that amount calculated on the Pooled Fund earning rate compounded on a monthly basis. 11. On 5 September 2005, the Appellant disputed the requirement to pay interest and this dispute was determined by the Respondent's Disputes Committee on 23 November 2005 by confirming the decision already made. The Appellant was notified of the decision by letter dated 24 November 2005. 12. On 18 May 2006 the present Superannuation appeal was filed. The appeal was filed within the time prescribed by s.88 of the Superannuation Administration Act, 1996. 13. The issues to be determined are: a. whether the appellant should be required to pay interest on the difference between her contributions and the R55 rate as a condition of being permitted to change her contributions status from R60 to R55 and b. if so, at what rate/basis should such interest be calculated. 4 The factual position asserted in the Superannuation Appeal document is different in one material and vital aspect to that which is contained in the agreed statement of facts. The Appeal document was based on an assertion that the applicant made a positive election to contribute on the basis of retirement age 55. The agreed statement of facts puts this matter on the basis of belief as contained within [4] and [5] set out above. That is, the applicant believes that she did elect to retire on full benefits at age 55. However, the evidence is that she has no particular recollection of completing any particular documentation that reflected such an intention. Nor does the applicant have any documentation or other evidence which would tend to prove that she did so elect. Neither the respondent superannuation fund nor any of the applicant's employers hold any documents or other information which would tend to prove that the applicant made a positive election to retire on full benefits at age 55. 5 Evidence adduced in the proceedings by Mr Leslie John Howe, employed in connection with the administration of the superannuation scheme, is to the effect that annual statements have been sent to members since 1991. However, copies of those statements have not been retained on the scheme's computer system prior to 1998, although the data that was included is available for the period 1992 - 1998. A copy of the data retained by the respondent for the applicant for the years 1992 - 1998 does not contain any particular reference to any designated retirement age. 6 There was adduced in evidence a copy of a sample annual statement for 1992 that is reconstructed from data held by the respondent. There is contained within that statement a list of benefit entitlements calculated at 30 September 1992. Under a heading "Benefit Type" there is a reference firstly to "Normal Retirement at Age 60 years" and then "Early Retirement at Age 55 years." There are differential fortnightly pension benefit amounts with respect to each of these retirement ages. However, there is, as I read the document, nothing in it that was indicative that the early retirement, at age 55 years, specifically applied to the applicant. The applicant's evidence was to the effect that on looking at documents of this kind, she assumed that the reference to the early retirement age would apply to her because she believed she had made that election. However, it seems from the totality of the evidence that the respondent has always regarded the applicant as not having made an election for early retirement at age 55 and as having agreed to contribute on the basis that she would retire at age 60. 7 None of this material assists the applicant in establishing that she had made an election to contribute to age 55 and the highest that it can be put, as is revealed in the statement of agreed facts, is that the applicant believed that she had done so. I add the qualification that in my opinion, the applicant has not established that she has done so or that it is more likely than not that she did so. In reaching this conclusion, I am mindful that the Court is not bound in the circumstances of these proceedings by the rules of evidence. Nevertheless, the respondent as trustee, and therefore the Court, in determining whether to approach the matter in a manner different from that adopted by the trustee respondent, needs to establish some degree of comfort in terms of the underlying factual situation. In determining that the applicant has not established that she made the election to contribute to age 55 or that it is more likely than not that she did so, I bear in mind the observations concerning the difficulty in proving what occurred many years ago made by the New South Wales Court of Appeal in McMurtrie v Commonwealth of Australia [2006] NSWCA 148. At [5] the Court said: "5. The difficulties in proving the precise terms or effect of a conversation that occurred a long time ago are well expressed by McLelland CJ in Eq. in Watson v. Foxman (1995) 49 NSWLR 315 at 318-9 as follows: Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act ), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not ... attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712. Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s52 of the Trade Practices Act 1974 (Cth) (or s42 of the Fair Trading Act ), in the absence of some reliable contemporaneous record or other satisfactory corroboration. That is the position in the present case 8 The above extract was referred to in similar vein by Schmidt J in this Court in Leckie v Crockett and ors (No 2) [2007] NSWIRComm 42 at [140]. 9 In allowing the applicant to make a lump sum contribution of what were, in effect, arrears in contributions to apply to retirement at age 55, the respondent acted in accordance with s 91 of the Superannuation Act 1916 which is in the following terms: 91 Time for making elections, applications and choices (1) Notwithstanding anything contained in this Act (subsection (2) excepted), an election, application or choice under this Act or any Act amending this Act: (a) shall be in writing, (b) may be made on or before: (i) the last day on which, but for this paragraph, it could be made, or (ii) the expiration of the period of 2 months after the right to make it arises, whichever is the later, but is not validly made unless received in the office of STC on or before the last day on which, pursuant to this paragraph, it may be made, (c) shall in the case of an election under section 21C take effect as from such date, or where such election is in respect of different amounts as from such respective dates, as STC determines and, in the case of any other election, application or choice, take effect and be operative where provision therefor is made by or under this Act as from the date so provided, or where no such provision is made as from the date it is received in the office of STC or such other date as STC may determine, (d) may, with the approval of STC, be amended or revoked subject to such conditions as STC may impose, including conditions as to the time or times at which, and the manner in which, the election as amended is to take effect, or the time at which the revocation is to take effect. (1A) The provisions of subsection (1) (c) and (d) do not apply to an election under section 61RB. (2) Where an election, application or choice is not made or received within the time prescribed in respect thereof by paragraph (b) of subsection (1) and STC is satisfied that in all the circumstances of the case it is desirable, that the election, application or choice should be accepted, STC may, subject to such terms and conditions as it may impose, accept the election, application or choice and deal with it as if it had been made or received within the time so prescribed. (3) Subsection (2) does not apply to or in respect of an election under section 21C. (4) The date or dates determined by STC under subsection (1) (c) as the date or dates as from which an election made under section 21C after the commencement of Schedule 6 to the Superannuation (Amendment) Act 1975 is or are to take effect shall not be later than the expiration of 7 months after the last day on which the election could have been made, but STC may determine a later date or later dates if it is satisfied that such special circumstances exist as warrant the determination thereof. (5) If an election to commute pension payable under section 28A or 28AA is made under section 21C by a contributor or pensioner who has not attained the age of 55 years, the date or dates determined by STC under subsection (1) (c) as the date or dates from which the election is to take effect must not be earlier than the date on which the contributor or pensioner attains the age of 55 years. (6) Where: (a) an election to commute pension payable under section 29 is made under section 21C by a pensioner, and (b) any employment which, on the pensioner's ceasing to be a contributor, the pensioner was entitled to count as service for the purpose of section 21 was, in total, for less than a period of 10 years, the date or dates determined by STC under subsection (1) (c) as the date or dates as from which the election is to take effect shall not be earlier than: (c) the expiration of 6 months after the day the election was made, or (d) the expiration of such time after the pensioner ceased to be a contributor as is equivalent to the balance of the period referred to in paragraph (b), whichever first occurs. 10 It will be seen that s 91(2) allows the late receipt of an election application or choice to be made "subject to such terms and conditions as (STC) may impose…." STC determined to impose the condition, as I have said, that the applicant contribute a lump sum including a component to reflect the earnings of the fund on these additional contributions over the relevant period. 11 The applicant complained that the imposition of this additional amount imposed an inappropriate and heavy burden on her. This is because at the time that the applicant eventually retired, having attained age 55, she paid an additional $60,053.56 in contributions. She paid a further $50,169.13 to represent interest on those monies at the fund-earning rate. I should add for completeness that by agreement between the parties the applicant has paid these additional monies by way of interest on the basis that if this Court upheld her appeal it would be refunded to her. 12 As against the requirement to pay these additional monies, the applicant has, however, gained some advantage because by the payment of those monies she has been able to effect retirement at age 55 with entitlement to a fortnightly pension or a lump sum payment. This is an entitlement which would not have accrued to her without payment of those monies until age 60. The evidence is that the applicant retired on 30 August 2006 when she decided to accept an offer of voluntary redundancy. It may be assumed that the ability to receive a gross pension, which as at March 2007 was $1,776.37 per fortnight on retirement, was seen by the applicant to be an advantage to her. The statutory background 13 This appeal is brought pursuant to s 88 of the Superannuation Administration Act 1996 which is in the following terms: 88 Appeals (1) A person aggrieved by a determination of STC or an STC disputes committee under section 67 (relating to determination of disputes) may appeal against the determination to the Industrial Relations Commission in Court Session (the "Commission"). (2) The appeal must be made within 6 months after the appellant is notified of the determination or within such further period as the Commission allows. (3) In dealing with the appeal, the Commission may exercise any function that could have been exercised by STC or the STC disputes committee, as the case may be, in making the determination the subject of the appeal. (4) In dealing with the appeal, the Commission is to have regard to this Act and any other relevant provisions regulating the superannuation scheme concerned and such other matters as it considers to be relevant. (5) In dealing with the appeal, the Commission is not bound by the rules of evidence and may inform itself in any manner it thinks fit. (6) The final determination made by the Commission on the appeal is to be given effect to as if it were a determination of STC. 14 The provisions of s 88 are relevantly identical with those of s 40 of the Act which have since been repealed. In considering the provisions of s 40 of the repealed Act in Jo Gedeon v First State Super Trustee Corporation [2005] NSWIRComm 62, I concluded that the appeal to this Court constituted an appeal de novo. (See [11] to [21]). Accordingly, the matter was to be determined "by reference to such of the evidence as the parties puts before (the Court), and such other material as the Court might properly consider by reference to (s 88(5))."(At [21]) 15 S 88(4) makes it clear that the Court is to have regard to that Act and any other relevant provisions regulating the superannuation scheme together with such other matters as the Court considers to be relevant. 16 The applicant maintained that the imposition of the requirement to pay the additional amount calculated by reference to the earnings of the fund was inappropriate and/or unfair and/or inequitable and/or unjust for the following reasons: (a) Although the applicant had no specific recollection of completing any documentation electing to retire at age 55, she is sure that she must have done so and that therefore any failure to deduct contributions at the appropriate age 55 retirement rate was an error on the part of the respondent. On this basis although the applicant should bear the cost of the additional contributions, she should not bear the interest on those contributions as claimed. That is the burden should be shared between her and the respondent. (b) The respondent had established a policy of making changes in contributor status from retirement age 60 to retirement age 55 where there was a record of a contributor's original election available upon payment of a notional interest rate of 2%. Given the factual circumstances in these proceedings, it was said that the applicant should be required to pay a 2% interest rate at its highest. (c) In fact, the applicant was being treated in the same way as if she had allowed her contributions to fall into arrears as a result of some conscious decision on her part to defer contributions during a period of leave without pay or because she had withdrawn funds through financial difficulties. It was unfair, it was said, that she should be put in a comparable position. (d) The applicant had been financially disadvantaged as a result of the requirement imposed by the respondent being required at the time of her retirement when all her available funds were needed to assist in the retirement process to fund a significant payment. 17 It will be seen that the submissions of the applicant were based on what I would loosely describe as "equitable" grounds. That is, they were based on concepts of unfairness, inequity, unjustness and the like. 18 The decision under challenge is a decision made by the respondent in its capacity as a trustee of a fund. The Superannuation Administration Act 1996 contains relevant provisions that impact upon the duties, obligations and responsibilities of the respondent. By s 49, the respondent is constituted the trustee for the relevant superannuation schemes, of one of which the applicant was a member. 19 By s 50(1)(d), a principal function of the respondent is "to ensure that benefits payable to the persons entitled to receive benefits under the STC schemes are paid in accordance with the Acts under which the schemes are established or constituted." 20 S 51 sets out the duties of the respondent. This is in the following terms: 51 Duties relating to functions (1) STC must: (a) act honestly in all matters relating to its functions relating to the STC schemes, and (b) exercise, in relation to all matters affecting the STC schemes, the same degree of care, skill and diligence as an ordinary prudent person would exercise in dealing with property of another for whom the person felt morally bound to provide, and (c) ensure that its functions relating to the STC schemes are exercised in the best interests of persons entitled to receive benefits under the STC schemes, and (d) not enter into any contract or arrangement, or do anything else, that would prevent STC from, or hinder STC in, properly exercising STC's functions as a trustee. Note: The duties contained in subsection (1) reflect the covenants required of superannuation scheme trustees under the Superannuation Industry (Supervision) Act 1993 of the Commonwealth. (2) In exercising its functions, STC must have regard to: (a) the interests of persons entitled to receive benefits under the STC schemes, and (b) the Heads of Government Agreement, commencing 1 July 1996, relating to the exemption of certain State public sector superannuation schemes from the Superannuation Industry (Supervision) Act 1993 of the Commonwealth, and (c) the future liabilities of the STC funds, and (d) any statement in writing of the policy of the Government on any matter that is relevant to the functions of STC given by the Minister to STC. (3) Subsection (1) (d) does not prevent STC from entering into a contract or an arrangement under section 53. 21 Of course, as asserted on behalf of the applicant, it is possible to focus attention on certain of the provisions of s 51 to the exclusion of others so as to bring about a particular result. The applicant directed attention to s 51(1)(c) which emphasises that the respondent should exercise its functions in the best interests of persons entitled to receive benefits. However, in my opinion, this is a matter that needs to be looked at in a balanced way having regard to the totality of the functions, duties and responsibilities of the respondent as the trustee of a number of schemes. 22 This need to apply a balanced and objective approach by reference to the interests of members of schemes requires an assessment of circumstances in which those interests may be taken into account. That is, it is only those interests which can validly be considered as appropriate having regard to the respondent's fiduciary duties, obligations and responsibilities in the context of the superannuation schemes as a whole. If one were not to take a qualified approach in this way, this would logically result in anything to the advantage of a particular member being permitted by way of benefit in the exercise of a discretion. 23 In considering these matters I shall take into account the following: 1) In determining whether to uphold or reject the appeal, I am conscious that the Court is placed in the position of substituting its decision for that of the respondent as trustee of the fund. In normal circumstances, a trustee would have regard to the totality of the provisions of the fund and the like when making a determination as to the exercise of a discretion that might impact upon the assets of the fund. However, it is not necessary to take this matter into account in the circumstances of these proceedings as submitted on behalf of the respondent. That is because, on the basis of evidence given by Mr Geoff McRae, the cost of any shortfall in the funds of the relevant superannuation scheme, if I were to accede in whole or in part to the appeal, would be borne by the employer by way of additional contributions to make up any shortfall. 2) The rate of interest fixed by the actuary did not take into account administration expenses and the like which are borne entirely by the employer. 3) Although she has now been forced to make payments in a lump sum to fund the shortfall in contributions, these are monies of which the applicant has had use, albeit of small amounts, over a long period of time. 4) A financial advantage, albeit unquantified, accrues to the applicant as a result of her entitlement to a pension payable upon retirement at age 55. 5) The respondent established a policy to deal with change in contributor status from retirement age 60 to retirement age 55 at a board meeting on 18 March 1998. That policy was in evidence in the proceedings. Because the policy is comprehensive and because I have determined that in all the circumstances it should be applied in the determination of these appeal proceedings, I set it out hereunder in full: STATE SUPERANNUATION SCHEME SSS1 Change in contributor status from retirement age 60 (R60) to retirement age 55 (R55) 98/054, Board meeting 18.3.98 Where a female member claims that when she joined the SSS, she elected to contribute for R55 but she is currently contributing for R60 and 1. the original election or such direct documentation is not available (as confirmed by the employer and the Administrator), and the member provides other documentation supporting her claim, eg a Statutory Declaration, and (a) the documentation fulfils the established criteria for approval of change of contribution status; (b) the member has agreed in writing to pay: (i) the difference between the amounts already contributed and the higher R55 rates, (ii) interest from the time the debt commenced accruing until the debt is eliminated at the fund earning rate compounded monthly; and (iii) contributions at the R55 rate commencing at the earliest possible date, and (c) the employer has been advised of the circumstances of the case and of the intention to change her contribution status to R55, then the Administrator is to approve a change in contributor status from R60 to R55 2. there is direct documentation (such as the original election form or letter from her then employer etc) that at the time of joining the SSS the member elected to contribute at the R55 rate, and the member has agreed in writing to pay: (i) the difference between the amounts already contributed and the higher R55 contribution rates, (ii) interest at 2% compounded periodically from the time the debt commenced to accrue until one period after the member was informed in writing by the administrator of the amount of the total contributions arrears plus interest, and (iii) contributions at the R55 rate commencing at the earliest possible date, then the Administrator is to approve a change in female contributor status from R60 to R55 and will advise the employer accordingly. A. Members who claim a change in contribution status have the right to dispute the delegate's decision and are to be advised of their dispute rights. B. Payment Arrangements In the options below, deferment of payment of arrears and interest will attract interest at fund earning rate compounded monthly. Contribution arrears plus any interest may be paid: 1. by regular instalments (eg payroll deductions) whilst remaining a contributor; or 2. by lump sum at any time prior to or at exit from the scheme; or 3. by lump sum at exit by reduction of the lump sum benefit or by part commutation of the pension benefit; or 4. if the benefit was crystallised prior to retirement age (55) due to invalidity or benefit preservation, by permanently reducing the relevant part or whole of the pension by dividing the total amount owing by the relevant pension capitalisation factor as provided to Pillar by the STC; or 5. by any combination of the above. No benefit is to be paid until arrangements have been made for the payment of contribution arrears and interest. 'Established Criteria' Referred To In 1(a) Of The Proposed Policy To Consist Of: a statutory declaration by the fund member declaring that the member had elected at scheme entry for age 55 retirement and detailing the member's recollection of this, plus at least one of the following: supporting statutory declaration by another person, not a family member, corroborating the member's claim any other relevant documents supporting the claim eg a statement from a financial advisor or financial institution corroborating the member's claim. * In addition, there must be no previous statement by the member suggesting that she had elected for R60 retirement. 24 The circumstances that apply to the applicant in these proceedings are those set out in [1] of the above policy document. They are to be contrasted with the circumstances that apply in [2] where evidence has been provided of an election to contribute at the retirement at age 55 rate has been established. In the latter case, a compounding interest rate of 2% is fixed as opposed to the actual fund-earning rate being fixed as quantification of the interest component in [1]. 25 I am of the opinion that having regard to the totality of the objects of the scheme and having regard also to the interests of the applicant as a member, the obligations and responsibility of the applicant's employer, including an obligation to contribute to any shortfall in funding, that the policy formulated by the trustee is an appropriate one. It applies to circumstances where a member is unable to demonstrate in a positive sense that an election to contribute to retirement age 55 has been made. The policy allows such a person to make additional contributions for the purpose of acquiring the ability to become entitled to payment on retirement at age 55, having made contributions only on a lesser basis postulated on retirement at age 60. If the additional amounts required to be paid by the member did not include an interest component quantified by reference to actual fund earnings this would result in a windfall gain to the member concerned. Fairness dictates that if the applicant is accorded the opportunity to gain entitlement to benefits upon reaching the earlier retirement age, the impact on the fund should be revenue neutral. I have reached such a conclusion without having regard to the fact that any shortfall would need to be funded by the employer. Such a need creates an additional reason in justification for the conclusion that I have reached. 26 In all the circumstances, it cannot be concluded that the respondent has acted in breach of its fiduciary duty as a trustee in formulating its policy position with respect to changing contributor status and in applying that policy to the applicant. On the contrary, I would conclude that in doing so the respondent acted in conformity with its fiduciary and other obligations in the administration of the State Superannuation Scheme. 27 The result is that the appeal should be dismissed. The parties have agreed that they will each bear their own costs of the proceedings. Orders 28 Accordingly, I make the following order, namely that the appeal is dismissed with no order as to costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.