The High Court has ruled that contributions to the CIÉ Superannuation Scheme must account for liabilities under the statutory funding standard, while finding that the scheme rules do not make CIÉ solely responsible for maintaining the fund’s solvency or prevent reductions in members’ benefits.
Mr Justice Mark Sanfey delivered the judgment on 19 April 2024 in proceedings brought by eight members of the scheme’s administration committee. They sought directions on the meaning of rule 20, which requires CIÉ, after consulting the scheme actuary, to contribute each year the sum it determines is necessary to support and maintain the fund’s solvency.
The judge answered that this obligation requires the scheme’s resources to meet, at a minimum, the statutory funding standard. The actuary’s assessment must also account for liabilities beyond those included in that standard. The judgment said the statutory funding standard reserve must also be satisfied, while noting that section 44 of the Pensions Act 1990 does not prescribe a specific time for contributions to be made.
That requirement is subject to rule 20(3). If CIÉ determines that its contribution in a period must exceed 3.6 times member contributions, the contributions of CIÉ and members must be reviewed. The rule does not impose a cap at that multiple, the judgment said.
The committee had argued that CIÉ’s duty to support and maintain solvency was incompatible with reducing member benefits. The court rejected that reading. Rules 19 and 20 allow the committee to vary member contributions, and the judgment said the employer’s obligation is not absolute. A negotiated funding proposal may involve increased member contributions and/or reduced benefits.
The case arose amid a long-running funding deficit. CIÉ said it had paid employer contributions at 3.4 times member contributions since 2018. After a union ballot in 2021, it submitted an amending scheme to the Minister for Transport reflecting a Labour Court recommendation, including raising the minimum normal retirement age from 60 to 63. The committee had not seen the draft amendment. The judgment said the interaction between that amendment route and the Pensions Act was not properly before the court, leaving questions about the submission for another day.
The court did not make final orders in the judgment. It proposed listing the case for mention on 3 May 2024, urging the parties to agree orders, including on costs, beforehand. If they could not agree, a short hearing would be held on the orders and costs.