Former Vodafone employee claims pension changes cost him €1m

A former Vodafone employee who claims a change to the company pension scheme cost him more than €1 million in lost benefits is entitled to have his complaint heard by the pensions watchdog, the High Court has ruled. 

 

The Trustees of the Vodafone Ireland Pension Plan had challenged a finding by the Financial Services and Pensions Ombudsman that retired Vodafone employee Gerry Fahy had brought his complaint over the scheme within the prescribed time limit for making complaints. 

 

Mr Justice Garrett Simons found there were no grounds for interfering with the ombudsman’s determination that Mr Fahy’s complaint was made within time. 

 

The Vodafone pension trustees, in their judicial review challenge against the ombudsman, in which Mr Fahy was a notice party, claimed the ombudsman was incorrect in his decision. 

 

Mr Fahy was a member of the pension scheme which was amended in May 2012, just a few months after he retired. 

 

He contended the amendment did not affect his pension entitlements in circumstances where he had retired prior to the coming into force of the amended rules. 

 

The pension provider disputed this interpretation of the effect of the amendment. 

 

Mr Fahy made his complaint to the ombudsman in August 2018 after he was provided with a statement setting out his pension benefits. 

 

Mr Justice Simons said it was apparent from the statement that the transfer value of his pension benefits had been calculated on the basis that the amended rules were applicable to his circumstances, notwithstanding his retirement from the company in 2011. 

 

The differential between the two bases of calculation was very significant: were the amended rules to apply, his benefits reduced by more than €1 million, the judge said. 

 

Amendment 

The pension provider argued that, for the purpose of the time limit for making a complaint, the time should be taken as running from 2012 and not from 2018. 

 

Mr Fahy, it was argued, was outside the maximum six-year time limit as his complaint was made in August 2018 and the amendment was made in May 2012. 

 

It was also argued the transfer value provided to Mr Fahy represented no more than the reflection of the “mathematical consequences” of the amendment. 

 

The ombudsman said the basis of Mr Fahy’s grievance was that the pension provider wrongfully calculated his transfer value. 

 

If the same transfer value calculation approach taken in 2012 was done in 2018, which Mr Fahy alleged was wrong and was denied by the provider, then those alleged wrongful calculations fell within the ambit of the 2017 Financial Services and Pensions Ombudsman Act and therefore the complaint was made within the required time limit, the ombudsman said. 

 

Mr Justice Simons ruled the approach to limitation periods under the 2017 Act is radically different from that governing legal proceedings. The limitation period here ran from the date of the last of a series of acts or omissions, not from the first, he said. 

 

The ombudsman correctly characterised the conduct complained of as ongoing conduct, entailing a series of acts on the part of the pension provider. 

 

Therefore, the date, in this case, was when the most recent act occurred – namely the provision in February 2018 of what Mr Fahy claimed was a gross underestimation of the true transfer value of his pension benefits, the judge said. 

 

The complaint was made within a matter of months of this date and was well within time, he said. He dismissed the pension provider’s judicial review in its entirety. 

 

The Irish Times