Judge dismisses financing agreement between Unisys and pension scheme
NETHERLANDS - Unisys’s €350m Dutch pension fund cannot claim an additional €32m contribution from its sponsor to address a funding shortfall from 2008, despite a pre-existing financing agreement.
The cantonal court in Amsterdam ruled that Unisys only needed to pay an additional €12.3m - the amount required to meet the minimum funding ratio of 104.3% at the end of the scheme’s three-year recovery plan.
The judge agreed with the company that the pension fund’s demand for an extra contribution was excessive, as “Unisys’s 2008 profit was €8.7m, while its own assets amounted to €35.3m”.
He rejected the scheme’s argument that Unisys had benefited for years from the open financing agreement, or that the company was obliged to stick with this arrangement even in “bad times”.
The pension fund - known as SPUN - claimed the employer had received a total discount on contributions of €36.2m between 1994 and 2002.
But the judge noted that the scheme had not paid back any contributions since 2003, and that the company had paid €12.3m in additional premiums between 2003 and 2007.
He said the €12.3m extra contribution Unisys had already paid for the 2008 shortfall had been “considerable”.
He also said SPUN had failed to prove it would need to cut pension rights if its claims were dismissed, also noting that the scheme had changed its plea several times.
The pension fund’s board described the verdict as “disappointing” and said it was seeking advice on the ruling’s ramifications.
According to Teun Huijg, a pensions lawyer at law firm Stibbe, the verdict could serve as a precedent.
“For the first time, the judge makes clear that, despite the financing agreement, the overall situation must be assessed,” he said.
“Apparently, the magistrate doesn’t consider that paying the claimed amount is reasonable and fair. He hasn’t even ruled that Unisys’s profit over 2008 must be used to fill in the shortfall at its pension fund.
“The verdict is, therefore, very interesting for other employers that are in a similar position as Unisys.”