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Latest NewsPay & benefitsInsolvencyPensions

European Court of Justice refers final salary pension schemes case back to UK High Court

by Greg Pitcher 25 Jan 2007
by Greg Pitcher 25 Jan 2007

Employers with final salary pensions schemes gained a reprieve today when the European Court of Justice referred a case against the UK government back to the High Court.

The court was widely expected to rule that the government had to give members of pension schemes their whole entitlement  when a company became insolvent.

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This would mean the government needing to find up to £2bn per year to keep the Pension Protection Fund afloat. The increased bills to employers would render many final salary schemes unworkable, according to commentators.

The European Court of Justice did rule that under the European Union Insolvency directive, the UK regime is “inadequate”. But it fell short of saying people should be compensated.

Greg Pitcher

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