Unions win landmark pensions case
Amicus Press Release
25th January 2007
Thousands of workers are celebrating today after the European Court of Justice (ECJ) ruled that the UK government has failed to properly implement European law and so could be entitled to full compensation for their lost pension savings.
In the case brought by Amicus and Community unions on behalf of 1,000 members formerly employed by Allied Steel and Wire (ASW) in Cardiff and Sheerness, the court found that successive UK government's have failed to properly implement the European Insolvency Directive which should have been in effect since 1983.
Now the UK courts could rule that workers should be fully compensated for losing all or substantial parts of their pensions after their employer's went bankrupt. The case now has to be referred back to the UK High Court which will decide if the breaches are significant enough to make the government pay full compensation to thousands of victims of company insolvency.
Derek Simpson, Amicus' General Secretary, said today: “This judgement vindicates our decision to take this case all the way to the ECJ. We have consistently said that we will defend our member’s rights on pensions and this case demonstrates that successive governments have failed workers who have heeded their advice to save for their retirement.
“We are confident that when this case returns to the UK High Court, our arguments will be upheld and our members who, through no fault of their own, lost all or substantial parts of their pensions, will be fully reimbursed. It is also a vital judgment in restoring people’s faith in the pensions industry. In order to save sensible and throughout their working lives, people need to be reassured that their money is safe."
The outcome of this case could also have a bearing on the Pension Protection Fund (PPF) set up by the government to protect workers' occupational pensions in cases of insolvency. Currently PPF is not retrospective and only covers people affected from May 2005 onwards. It also sets limits at 90% of people's lost pensions and a cap of £26,000 which could be deemed illegal.
In the region of 125,000 workers are thought to have lost their savings through the insolvency pension’s trap.
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