The Court of Appeal has dismissed an appeal by three employers against a High Court order requiring them to pay €2,439,193.56, including interest, towards a pension scheme shortfall. The appeal concerned when the employers’ contribution obligation ended and how the shortfall should be measured.
The plaintiffs were trustees of the Omega Pharma Ireland Pension and Death Benefits Scheme. The defendants were Damianus BV, the principal employer, and associated employers Omega Teknika Ltd. and Chefaro Ireland Ltd.
On 1 October 2012, Damianus gave three months’ notice of its intention to stop contributions and proposed 31 December 2012 as the scheme’s winding-up date. The trustees agreed to that date. They later sought funding for a shortfall in the scheme, initially assessed at €3.01 million and subsequently reduced to €2.25 million. The employers disputed liability, arguing that their obligation ended when notice was given, or was limited to the statutory Minimum Funding Standard.
The Court of Appeal said the relevant provisions of the trust deed were difficult to reconcile. It held that the clause specifically addressing discontinuation of contributions governed the date when those contributions ceased. Under that clause, the agreed date was 31 December 2012. The court said it would make little practical sense to require three months’ notice if the scheme were treated as wound up, and contributions ended, on the day notice was given.
The court also rejected the employers’ argument that liability was capped at the Minimum Funding Standard. It said the deed required funding necessary to support the fund and provide the scheme’s benefits. The employers had acknowledged that the statutory minimum was insufficient to provide those benefits. The court accepted €2.25 million as the shortfall claimed.
The appeal was dismissed. The judgment gives the court’s reasons for that dismissal; the High Court order remained in place.