Three former Indeni Petroleum Refinery Company Limited employees have sued the company in the Lusaka High Court seeking damages for delay in payments of their correct benefits, claiming that they received a lower pension than they were entitled to.
Indeni Petroleum Refinery has been sued by Elvard Nyirenda, Fitaliano Mwila and Dickson Chitambo Mwila.
In a statement of claim filed in the Lusaka High Court, April 11, the trio stated that they were former employees of the defendant, adding that during the time they were in employment, they were all members of the Indeni Petroleum Refinery Company Limited Pension Scheme.
They stated that the Pension Scheme had been set up by the company as sponsoring employer, with the principle objective of accruing retirement benefits for the employees whose benefits would be paid out upon reaching retirement age.
The trio stated that when they became members of the Pension Scheme, it was a “defined benefit pension” in nature.
They added that the pension benefits were treated as “defined” on the basis of amounts calculated and known in advance irrespective of contributions made by the members and its sponsoring employer.
The trio claimed that sometime in September 2013, the company acting through its Managing Director Maybin Noole, in breach of the Trust Deed and the Rules, unilaterally migrated the Pension Scheme from a ‘defined benefit plan’ to ‘defined contribution pension plan’.
They explained that in accordance with principles, custom and usage in the pension industry, a ‘defined contribution’ entailed that benefits were paid on the basis of a formula that was referable to actual amounts contributed by the members of the scheme and the sponsoring employer.
“The following factors were taken into consideration; date of birth, pension service, date joined the scheme, basic salary, communication factor, retirement date and monthly contributions,” read the statement of claim.
The trio further claimed that there was neither a formal notice issued by management of the company regarding the migration from the ‘defined benefit’ to the ‘defined contribution’ nor was there any consent given by them and other pensioners.
They added that to that extent, their conditions of service were changed unilaterally.
The trio stated that upon retiring from the company on various dates, they were paid amounts which on further inquiry, they came to learn had been paid on the basis of the ‘defined benefit plan’ and payslips of September 2013 while still in service, as opposed to a computation of the last payslip on normal separation from employment.
They claimed that the discrepancy had resulted in underpayment and therefore, the trio received a lower pension than they were entitled to.
“More than a year after their retirement, the defendant caused to be paid out of the Pension Scheme amounts on the basis of the defined contributions benefits based on September 2013, calculations as follows; (I) in respect of Nyirenda, the sum of K173,282.60 instead of K272,119.17. (ii) In respect of Mwila, the sum of K278,361.04 instead of K441,310.61. (iii) In respect of Chitambo, the sum of K175,929.40 instead of K274,080.69,” read the statement of claim.
The trio stated that as a result of the wrong payments of their benefits on the basis of the defined benefits calculated in September 2013 as opposed to the defined benefits of last payslip which occurred in 2014, April and May respectively, they had lost value in respect of the said pension benefits due to them.
They now claim damages for delay in payments of the correct benefits due to them, interest accrued on the benefits, interest at the current commercial bank lending rate, costs and any other relief.