The High Court has ruled that a Vodafone pension scheme’s rules guarantee pension increases for members of Scheme C, a group that includes former civil servants transferred from the eircom scheme. It also directed that, unless the parties agree another comparator, increases are to track the average percentage salary increase across Vodafone staff.
The judgment, delivered by Ms Justice Eileen Roberts on 14 May 2024, concerned the meaning of Rule 10 in the 2005 deed governing the Vodafone Ireland Pension Plan. The court was asked to interpret the deed and identify the comparator for calculating increases. A separate claim for rectification was not advanced at the hearing and was left for further consideration. Issues of misrepresentation, estoppel and legitimate expectation were not before the court.
Vodafone argued that increases were discretionary and that a capped Consumer Price Index measure would be a suitable comparator. The trustees and Gerard Fahy, appointed to represent Scheme C members, argued that the rule guaranteed increases linked to pay. The dispute turned in part on the rule’s wording that pensions “will increase” and would increase in line with the percentage increase in the member’s relevant grade.
The judge concluded that the rule, as written, provides a guaranteed entitlement to pay-linked pension increases. The wording differed materially from the earlier deed, which expressly gave the company discretion, and the court found that Vodafone’s interpretation would leave the rule’s reference to increases by grade without effect. It also rejected Vodafone’s argument that the wording could be corrected as an obvious mistake.
The court determined that the appropriate comparator is the average percentage salary increase across Vodafone’s general staff. The calculation excludes increases relating to increments, promotions, variable payments and ex gratia payments, including performance-related bonuses. The judge rejected capped CPI as a comparator under the rule because it does not provide an actual link to staff pay. She also found that calculating an average salary increase was not impossible or onerous for Vodafone.
The parties may agree a different comparator acceptable to all stakeholders, including one based on an agreed statistical measure. The court also determined that the 2012 deed did not create an additional guaranteed benefit for service between 15 December 2005 and 20 May 2012. It did not determine the outstanding rectification claim or the final form of order: the matter was listed for mention on 29 May 2024 so the parties could address the order.