Tara attempt to exclude pension benefits fails

The High Court has rejected an attempt by Tara Mines to exclude up to 80 disabled former miners from certain substantial pension benefits available to existing employees.

Ms Justice Mary Finlay Geoghegan ruled yesterday that former workers in receipt of benefits under the income continuance plan of the company are entitled to pension improvements sanctioned for the Tara Mines pension plan in 1999.

The decision means that workers in receipt of income continuance will, in common with existing employees, not be subject to substantial deductions from their pensions.

Boliden Tara Mines Ltd, the principal employer of the Tara Mines pension plan, had claimed the 1999 benefits were not intended for those on income continuance. Alternatively, if the court found they were entitled to those benefits, it argued that it was entitled to court orders which would have the effect of excluding them.

The action was brought by Boliden against the current trustees of the Tara Mines pension plan, the Irish Pensions Trust Ltd, which was trustee of the plan until December 20th, 1999, and Michael Sheils, a representative beneficiary of those on income continuance. The company said the cost of extending benefits to this group was substantial and would have implications for the pension fund.

In her 64-page reserved judgment yesterday, Ms Justice Finlay Geoghegan dismissed all the company's claims. While noting that the company, the current trustees and the Irish Pensions Trust had emphasised the "funding implications" for the pension plan if the company lost, that was not a fact the court could take into account.

The judge noted the pension plan was established and operated under trust and rules declared by the company. Since 1996 it was governed by a deed of amendment between the company and Irish Pensions Trust, which defined pensionable salary as a member's annual rate of basic salary less an amount to be decided by the employer not exceeding 1½ times the annual State old-age pension.

The OAP deduction provided for in the 1996 deed was known as integration. A proviso in a further deed of amendment in 1999 removed integration and this change, the judge noted, represented a significant benefit for members, especially lower-paid workers.

Among the issues the judge had to decide was whether the proviso in the 1999 amendment applied to the group on income continuance - persons in receipt of benefits under the income continuance plan of the company from February 20th, 1998. She ruled that it did and said she could not construe the word "member" in the proviso so as to exclude income continuance plan beneficiaries.

She also ruled that evidence relied upon by the company and supported by IPT and the current trustees fell far short of the "convincing proof" or "cogent evidence" required for rectification.

There was no cogent evidence that the company, when amending the pension plan rules, intended only to eliminate integration for active employees and not to eliminate integration for the ICP beneficiaries, she found.

She found no evidence had been adduced of any express decision taken by IPT to consent to an amendment to the definition of a pensionable salary, which was to exclude income continuance plan beneficiaries from the benefit of the removal of integration.