Complainant

Respondent

Parties

Gerard Mooney

St Patrick’s University Hospital

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00042974-001

09/03/2021

Mr Mooney was a psychiatric nurse in St Patrick’s Hospital for 43 years.  In December 2017, following negotiations between the unions and management on the winding up of the hospital’s defined benefit pension scheme, he received a letter confirming a personalised schedule of contributions to be paid into a defined contribution scheme on his behalf.  The agreement was that each member of the defined benefit pension would receive 40.5% of his or her 2017 salary plus 1% of their 2017 salary for each year of future service from August 2017 up to retirement age.  Mr Mooney received a calculation of the contribution to be paid on his behalf, based on retirement at age 65 in 2020, age 66 in 2021 and age 67 in 2022.

Mr Mooney retired in July 2020, at age 65.  He claims that there is an error in the amount paid into the defined contribution scheme on his behalf.  It is his view that the error occurred because the hospital management calculated his contributions based on the government’s decision to move the age of eligibility for the state pension to age 66 in 2014 and the proposal (which didn’t go ahead) to increase the age of eligibility to 67 in 2021.  He also claims that the calculations do not correctly reflect his 2017 wages.

The budget for 2021 was announced on October 13th 2020.  The minister for finance confirmed that the State pension age was to remain at age 66.  Mr Mooney had been retired since July and, on October 19th, he wrote to the hospital claiming that the minister’s decision not to increase the State pension age to 67 invalidated the schedule of payments used to calculate the amount paid into the defined contribution scheme in 2017.  He claimed also that the decision supported his assertion that the calculations should have been based on his contractual date of retirement at age 65.

On February 19th 2021, the director of HR, Mr Brendan Power, wrote to Mr Mooney and explained that the State retirement age and the hospital’s normal retirement age were aligned at age 66, although staff who were recruited before 2014 could choose to retire at age 65.  Mr Power referred to the 2017 Agreement reached with the assistance of the WRC which resulted in a personalised pension statement being issued to each employee.  The calculations were based on several elements, one of which was the application of the hospital’s normal retirement age of 66 which was proposed to increase to 67 in 2021 and 68 in 2028.  Mr Power remarked that “This reflected the prevailing reality and it was reasonable for the parties to the WRC Agreement to expect that the government would adhere to this increase in the State Retirement Age.”  Although the decision to increase the State pension age to 67 and then to 68 was suspended by the government in October 2020, it is the hospital’s position that the terms of the WRC Agreement were correctly applied to Mr Mooney’s personalised payments and that the decision not to increase the pension age is not relevant to how Mr Mooney’s calculations were done.

The Relevant Law

The complainant submitted this complaint under the Payment of Wages Act 1991.  Section 1 of the Act sets out a definition of Wages:

“…wages in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including -

(a)  any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment, or otherwise, and,

(b)  any sum payable to the employee upon the termination by the employer of his contract without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice.”

Provided however that the following payments shall not be regarded as wages for the purposes of this definition:

(i) (Not relevant to this complaint),

(ii) any payment by way of a pension, allowance or gratuity in connection with the death, or the retirement or resignation from his employment, of the employee or as compensation for loss of office,

(iii), (iv) and (v) are not relevant to this complaint.

Findings

It is clear from sub-section (b)(ii) above that payments related to a pension are excluded from the definition of “wages.”  I must conclude therefore, that this complaint falls at this hurdle, and I have no jurisdiction to consider the matter any further. 

As I have concluded that pensions are not included in the definition of “wages” at s.1 of the Payment of Wages Act 1991, I decide that this complaint is not well founded.

Pension, definition of wages