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Judgment No. 4057

Decision

The complaint is dismissed.

Summary

The complainant challenges the decision to reduce her pension on the basis of a reduction of the consumer price index.

Judgment keywords

Keywords

pension; pension adjustment system

Consideration 3

Extract:

The rule or principle of interpretation is that a clause in a document should be interpreted in favour of the party who did not draft the clause (in this case the staff), and not in favour of the party who did draft the clause, sought the inclusion of the clause or possibly in whose interests the clause was intended to operate (that is to say contra proferentem). However this rule, whatever its width, only operates in circumstances where the clause is ambiguous (see, for example, Judgment 1755, consideration 12, and, more recently, Judgment 3355, consideration 16).

Reference(s)

Jugement(s) TAOIT: 1755, 3355

Keywords

staff member's interest; interpretation; contra proferentem

Consideration 3

Extract:

A consumer price index is typically a measure of movements from time to time in the prices of a basket of goods or services, usually relative to a base point established some time earlier. While often, historically, those movements have been upwards (that is, increasing relative to the base point), the very nature of the index will mean there will be downward movements at times of deflation when the price of the basket of goods and services tends towards the base point. The language of Article 32(b), and in particular the word “adjusted”, makes clear that the retirement benefits will be adjusted upwards or downwards (and potentially remain constant) depending on the movement in the Swiss consumer price index.

Keywords

cost-of-living increase; pension; pension adjustment system; consumer price index

Consideration 5

Extract:

The Tribunal has, in its case law, spoken of pensions being “deferred pay” and stated that because “pensions are subject to the same basic rules as pay, a method establishing the terms of adjusting the pensions paid to the retirees of an organisation is to be considered as being governed by the same requirements” (see Judgment 2793, consideration 20). This was a reference to the need that any methodology adopted to determine staff members’ salary adjustments must result in stable, foreseeable and clearly understood results. [...] The principles governing the adjustments to salary also include the Noblemaire principle which, additionally, applies to pension benefits (see Judgment 986, consideration 7).

Reference(s)

Jugement(s) TAOIT: 986, 2793

Keywords

noblemaire principle; salary; pension; pension entitlements; pension adjustment system

Consideration 6

Extract:

The Tribunal’s case law does not establish a principle that there can never be a downward adjustment of pensions (that there can be such downward adjustments is apparently accepted by the complainant in her rejoinder) and indeed there is a theme in the case law that it is entirely appropriate to have, in the rules governing pension funds, a provision to preserve the purchasing power of the pension, to protect staff members from “the adverse repercussions of a rise in the cost of living on their purchasing power and hence in theory to maintain the standard of living their pension initially secured for them” (see Judgment 2615, consideration 6). As a matter of logic and fairness, this approach would justify a reduction in pensions in the face of falling costs of living.

Reference(s)

Jugement(s) TAOIT: 2615

Keywords

adjustment; pension; pension entitlements; pension adjustment system

Consideration 7

Extract:

The complainant appears to argue that she (like other recipients of the pension presumably) is being treated unequally because of a practice to freeze salaries of serving staff rather than reduce them even if the methodology for salary calculation and adjustment might otherwise suggest a downward adjustment. However these two classes of individuals are not in the same position in fact or in law (see, for example, Judgment 4029, consideration 20). The former are not members of staff, the latter are.

Reference(s)

Jugement(s) TAOIT: 4029

Keywords

equal treatment

Consideration 7

Extract:

Moreover a salary, at base, is to reward specified work. A pension, at base, is to provide an income stream to a pensioner to maintain a particular standard of living during retirement.

Keywords

salary; pension



 
Dernière mise à jour: 04.04.2019 ^ haut