The High Court ruled that a severance agreement entitled former ACC Bank executive Edward Kingston to the same early pension option offered to other defined benefit scheme members aged 55 and over. Under that option, he could receive a non-discounted pension from age 55 with a lump sum calculated at four weeks’ pay for each completed year of service.
Mr Justice Iseult O’Malley delivered the judgment on 19 March 2013 in Kingston’s claim for specific performance of an agreement made on 6 July 2009. Kingston had been made redundant when the bank abolished his role as Head of Strategy, Marketing and Communications during a restructuring.
The agreement provided for a gross payment of €280,000, including a termination bonus of €125,000. It also said that if the bank offered defined benefit scheme members early pension or other benefits beyond those offered to Kingston before his deferred pension began at 60, he would receive those benefits at the relevant age. The agreement defined early pension as payable up to and including age 56.
After the Labour Court recommended a severance package in August 2009, the bank and trade unions accepted an arrangement giving staff aged 55 or older a choice: eight weeks’ pay per completed year, or an immediate non-discounted pension with a lump sum of four weeks’ pay per year. The bank initially offered Kingston an uplift to eight weeks’ pay plus a separate payment, but no change to his pension. It later offered him the choice between that package and the age-55 pension option, while disputing that he was entitled to the latter.
Kingston argued that the agreement gave him an early pension on the same terms as any other scheme member, without linking that pension to a reduction in his lump sum. The bank said he could not receive a better combined benefit than other employees. Although Kingston had received and apparently lodged a cheque calculated at eight weeks’ pay per year, both sides agreed the court should decide the case as if he had not exercised an option.
Justice O’Malley found that the clause was intended to ensure Kingston was not disadvantaged by the outcome of the wider workforce negotiations. It was triggered by the early pension offer to staff aged 55 and over, but did not entitle him to an earlier pension or a better package than theirs. The court held that the age-55 pension with the four-weeks-per-year lump sum was the option to which he was contractually entitled. The judgment did not state that Kingston had accepted that option or make an order requiring the bank to pay it.