UK - Trade unions fear their lawsuit against the government has been sabotaged by its £400m compensation package for workers who lost pension savings when their firms folded.
The ISTC and Amicus launched a £2m case in the European Court of Justice over the government’s “failure” to implement properly the 1983 European Insolvency Directive – a measure which protects members’ pensions in the case of company insolvency.
If the ruling went against the government it would be forced to compensate thousands of former Allied Steel & Wire workers who lost up to 90% of their pension pots when the firm folded in 2002.
A ruling in the unions’ favour would also open up claims from around 60,000 other scheme members who have lost an estimated £2.28bn.However, unions fear the government’s plan to pay victims £400m over 20 years may kill the case, even though the figure is well below the amount needed to compensate them fully.
Thompsons Solicitors partner and head of pensions Ivan Walker, acting on behalf of the unions, said a decision on whether to proceed would be made within two weeks.
“Both unions essentially want to see how the new financial assistance scheme shapes up and this detail is simply not known yet. If they agree to 100% for everybody this case goes away, if it doesn’t, it will depend on how close it comes to sorting this out.”
Pensions Action Group spokesman and former ASW Sheerness worker John Hayter said he was outraged that the case might not go ahead.
“It has weakened the case because we were arguing the government didn’t protect our pensions, but now it can say it is offering some money.”
“It is an absolute disgrace because it didn’t do this for us, it did it to avert a backbencher revolt on the issue – £400m is nowhere near enough.”
The People's Pension, Atlas Master Trust and The Cheviot Trust have been granted authorisation from The Pensions Regulator (TPR), taking the total number of authorised master trusts to 18.
Pension schemes have been warned they may now face a more challenging legal test if they wish to fix drafting errors.
The Greene King Pension Scheme has appointed XPS Pensions as its actuarial and investment adviser following a competitive tender process.
Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...